Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

LANCASHIRE COUNTY COUNCIL (GENERAL POWERS) BILL [Lords] (By Order)

LIVERPOOL EXTENSION BILL [Lords] (By Order)

Second Reading deferred till Thursday.

SUNDERLAND CORPORATION BILL [Lords] (By Order)

Read a Second time, and committed.

PETITION

ENTERTAINMENTS DUTY (CINEMAS)

Colonel Crosthwaite-Eyre: I desire to present what, I understand, is the largest petition that has ever been presented to this House. It is from the cinema-goers of England, Scotland and Wales. It is the more remarkable in that the whole of this Petition has been signed by citizens of this country within 12 days. It is a spontaneous reaction of what they feel. The cinema exhibitors know that they must help in providing the extra taxation made necessary by the defence programme. At the moment, they are providing over 80 per cent. of the total amount collected under the Entertainments Duty.
In their material allegations in this Petition, they make the following points. They ask for no reduction, but merely that the Duty shall so be imposed that they, in their turn, can meet their duties to the public. They have fair and just costs to meet, including lighting, furnishings, and wages. They can meet them only if, in regard to the tax they are called upon to provide, they may, in turn, charge a proper and fair price to the public. No doubt, if the Budget pro-

posals are accepted—[HON. MEMBERS: "Speech."] I am reading from the provisions of the material allegations. If it will assist the House, I will read out all the material allegations, but I am trying to truncate them. If these Budget proposals are accepted, there can be no question that many cinemas will have to close because of them. The Petition has been signed by 3¼ million people.

Mr. Speaker: I think that the hon. and gallant Gentleman's remarks are going beyond what is reasonable. One may not state all the reasons. One may not make a debating speech on this occasion. Only a short statement as to what is in the Petition can be given, and it should then end with the words, "Your Petitioners humbly pray."

Colonel Crosthwaite-Eyre: I apologise, I said that I would read all the material allegations, if that was more convenient to the House.

Mr. Speaker: That would mean speaking at great length. A petition has to be a very short statement, according to the Rules.

Colonel Crosthwaite-Eyre: That is what I have tried to do. If I have failed, I ask the indulgence of the House. I have tried to truncate the material allegations into a very short speech. In fact, they cover two pages. I conclude by saying that I hope this Petition will be received by the House, as it does represent a large cross-section of the British public.

Mr. Speaker: The hon. and gallant Gentleman has not ended it accurately. He must end with "Your Petitioners humbly pray."

Colonel Crosthwaite-Eyre: "Wherefore your Petitioners humbly pray that the proposals contained in the Finance Bill, 1951, for upward revision of the Entertainments Duty on payments for admission to cinematograph performances, which proposals they regard with the utmost anxiety and dismay, should be modified."

Mr. Speaker: Even now I have hot heard the final words "And your Petitioners will ever pray."

Colonel Crosthwaite-Eyre: I apologise, Mr. Speaker, and add:
And your Petitioners will ever pray.
Petition to lie upon the Table.

Oral Answers to Questions — EMPLOYMENT

Flying Instructors (Pay)

Mr. Perkins: asked the Minister of Labour the results of the meeting of representatives of the operators of Reserve Flying Training Schools and the British Air-Line Pilots Association held on 22nd April under his auspices concerning rates of pay for flying instructors employed at these schools.

The Minister of Labour (Mr. Robens): After the preliminary meeting which was held on 2nd April between the representatives of the operators of Reserve Flying Training Schools and the British Air-Line Pilots Association, the employers held a separate meeting on 30th April and subsequently asked the Department to convene a further joint meeting with the Association. This was held on 30th May and, although progress was made, two points still remain to be decided. These are the subject of further consideration, and the parties have agreed that they shall be submitted to arbitration, if not otherwise settled.

Mr. Perkins: I thank the Minister for his very helpful attitude in this difficult problem, but would he use his good offices with the Air Ministry to persuade them to adopt a less unhelpful attitude, because the whole problem depends entirely on whether the Air Ministry will be prepared to negotiate fresh contracts with these various firms?

Mr. Robens: I think the discussions are going well. When the hon. Member reads the answer I am perfectly certain that he will be satisfied with the progress which has been made.

Mr. Perkins: Is the right hon. Gentleman aware that the men concerned are so dissatisfied that they are taking the dispute to the industrial court?

Retirement Age

Mr. Boyd-Carpenter: asked the Minister of Labour whether he is yet in a position to make a statement as to the result of his efforts to secure the abolition of fixed age limits in the Civil Service and in the employ of nationalised industries.

Mr. Robens: I have drawn the attention of the authorities concerned to the

Government's policy on this matter, and they are now reviewing their arrangements, where appropriate, through Whitley or other consultative machinery.

Mr. Boyd-Carpenter: Does the right hon. Gentleman contemplate any public statement being made as to the result of these discussions with a view, among other things, to setting a good example to the private sphere of industry?

Mr. Robens: Yes; certainly. When an official decision is made I certainly intend to make a public statement.

Mr. McCorquodale: In view of the widespread concern expressed on all sides of the House in a recent debate, will the Minister press forward vigorously in this matter?

Mr. Robens: indicated assent.

Mr. Harrison: Will my right hon. Friend pay special attention in these negotiations to securing normal promotion arrangements?

Mr. Robens: The Whitley Councils are judges in this matter. I am perfectly certain that by dealing with the matter through them the proper results will eventually be reached.

Recall to Forces (Employees' Pay)

Mr. Boyd-Carpenter: asked the Minister of Labour whether he is yet in a position to make a statement as to the results of his representations to the nationalised industries on the subject of the making-up of pay of employees of those industries recalled to the Forces.

Mr. Robens: I have made no such representations. This is a matter for the industries themselves to determine through the appropriate negotiating machinery.

Mr. Boyd-Carpenter: Is it not the duty of His Majesty's Government to indicate their views on a matter of importance to the industries they control, and is it not anomalous that legislation should at present be before the House to enable local authorities to do what His Majesty's Government will not raise a finger to persuade nationalised industries to do?

Mr. Robens: That, of course, is not a fact. The nationalised industries understand the Government's position on this point and are at present considering their action.

Mr. Butcher: Does the right hon. Gentleman mean to say that he is leaving it entirely free for one nationalised industry to move in one direction and another nationalised industry to take quite another decision in the opposite direction?

Mr. Robens: Certainly. The nationalised industries must be free to deal with these matters through the proper negotiating machinery which has been set up.

Mr. Pannell: Will my right hon. Friend make representations to see that whatever financial obligations are laid upon the nationalised industries will also be laid upon private employers?

Major Guy Lloyd: Is the House to understand from the right hon. Gentleman's statement that he does not think it is a good thing for the Government to exercise any control over the nationalised industries?

Mr. Robens: The Government exercise control over the nationalised industries through the appropriate Ministers in charge of them by the authority they have under the Acts to make directions. This is not a matter which requires a direction at this stage. I have said that the nationalised industries are considering it at the moment. In point of fact, the Government themselves have not yet reached a decision on the matter.

Dock Labour (Unofficial Stoppages)

Mr. J. R. Bevins: asked the Minister of Labour (1) if he has now considered the Report of the Committee of Inquiry into unofficial stoppages in the London docks; and if he will make a statement;
(2) if his attention has been drawn to the observations of the Committee of Inquiry into Unofficial Stoppages at the London docks with regard to the motives of certain unofficial leaders; and if he will introduce legislation to prevent the abuses revealed by the Inquiry.

Mr. Nigel Fisher: asked the Minister of Labour what action the Government propose to take arising out of the Dock Labour Report prepared by Sir Frederick Leggett's Committee.

Sir Waldron Smithers: asked the Minister of Labour what action he proposes to take on the recommendation of

the Committee of Inquiry on unofficial stoppages at the London docks, Command Paper 8236; and if he will make a statement.

Mr. Robens: The first step is to consult the various bodies concerned. Their views have been requested and discussions arranged. I shall complete these consultations as rapidly as possible to enable decisions to be taken.

Mr. Bevins: May I put two questions to the right hon. Gentleman? First of all, do I take it that His Majesty's Government have accepted the findings of the Leggett Committee? Secondly, is it intended that any action the Minister may take shall apply to Merseyside and other ports, as well as to London?

Mr. Robens: There will obviously be matters arising from the Leggett Report which will affect other ports besides the London docks. There are many things in the Report which need very careful discussion with the bodies concerned, and those discussions are now taking place.

Sir W. Smithers: Has it not become increasingly obvious that the T.U.C., being the paymasters of the Government, are having undue influence on policy? Will the Government either govern or get out? Answer that one!

Mr. Sydney Silverman: Will my right hon. Friend bear in mind that, whatever may be the truth as to London, there is a great deal in the Report of this Committee which certainly does not apply to many dock areas outside London, and will he not see that if he intends to do anything affecting those other areas it is necessary to have a committee to inquire into the conditions at the other ports?

Mr. Robens: What my hon. Friend has said indicates the necessity for very careful consideration of this Report and for adequate discussions with all sides of the industry concerned.

Aircraft Industry (Skilled Labour)

Air Commodore Harvey: asked the Minister of Labour what deficiencies are expected in skilled labour available for the aircraft industry; and if he will make a statement.

Mr. Robens: There is a growing scarcity of certain types of skilled labour


required for aircraft production. These deficiencies will, to a considerable extent, be met by the transfer of skilled workers from civilian work to defence contracts, but there are not enough skilled workers to meet all demands. The difficulty must therefore be met by the development of schemes of upgrading and training. I am watching the situation closely in consultation with both sides of industry.

Air Commodore Harvey: Does the right hon. Gentleman realise that even in the first few months of the expansion programme certain factories are already short of skilled tradesmen and that a long-term programme will not suffice? What does he intend to do in the immediate future, because the defence of this country in the main depends on the aircraft industry?

Mr. Robens: It is a fact of which everyone should be well aware that there is an over-all shortage of skilled workers in this country. When one imposes a defence programme of this magnitude on the country, that problem becomes accentuated. What we are doing, and what I always propose to do, is to consult both sides of industry to meet a problem of that kind.

Redundancy, Coventry

Miss Burton: asked the Minister of Labour if he will make a statement on the degree of liaison established between his Department and employers for the purpose of avoiding unemployment in Coventry due to shortage of raw materials by the absorption of such personnel elsewhere.

Mr. Robens: Following discussions with the National Joint Advisory Council, employers at Coventry and elsewhere have been asked through their associations to give my local offices early intimation of prospective redundancies. Similarly, trade unions have been asked to advise workers whose jobs are coming to an end to register at local offices whilst they are still in employment, so that there may be an opportunity to help them to find other work without any interval of unemployment.

Miss Burton: Does my right hon. Friend realise that there is real appreciation of the work which he is doing in this connection and that in Coventry the trade union movement is giving full co-operation

to the employment exchanges in this matter?

Mr. Edelman: Will my right hon. Friend confirm that no major decision about the movement of labour will be taken without prior consultation with the trade unions, both on a national and a local level?

Mr. Robens: That is, in fact, what I am doing, and the general idea behind the proposals I am carrying out is that if redundancies are notified in good time, then when a man's employment comes to an end on Friday night there will be a job for him somewhere else on the Monday morning.

Electrical Trades Union (Dispute)

Sir W. Smithers: asked the Minister of Labour what action he proposes to take on the recommendation of the court of inquiry into the dispute between the Electrical Trades Union and the London Electricity Board, Command Paper No. 8232; and if he will make a statement.

Mr. Robens: Copies of the report of the court of inquiry were sent on 17th May to each of the parties concerned. I have asked them to give urgent consideration to the conclusions of the court and to inform me of the outcome.

Sir W. Smithers: Is the Minister aware that I can only repeat the supplementary question I put on Question No. 8?

Statutory Instrument, No. 1305

Mr. Boyd-Carpenter: asked the Minister of Labour what are his intentions with reference to the continuation in force of Statutory Instrument, 1940, No. 1305.

Mr. Robens: I am at the moment discussing this question with my National Joint Advisory Council, and I will make an announcement at the earliest opportunity.

Mr. Boyd-Carpenter: In view of the uncertainty which at present exists on this subject, will the Minister do his best to expedite that announcement?

Mr. Robens: I can assure the hon. Gentleman that an early decision will be made, so far as it remains for me to make it.

Sir Herbert Williams: Will the strike, or cessation of work of the tally clerks at the London docks be covered by No. 1305?

Mr. Robens: That is another question.

Sir H. Williams: It is the same strike.

Equal Pay

Mr. Grimond: asked the Minister of Labour whether he will ensure that at the forthcoming meeting of the International Labour Office the British representative votes for the principle of equal pay for work of equal value whether done by men or women.

Mr. Robens: The International Labour Conference will be discussing proposed international regulations embodying a number of general principles relating to equal remuneration for men and women workers for work of equal value, together with suggested methods of application. I cannot attempt to indicate in advance the attitude of the Government on the various detailed questions which will arise in the course of the conference discussions.

Mr. Grimond: Can the Minister say whether, in general, equal pay for equal work is the policy of His Majesty's Government?

Mr. Robens: His Majesty's Government have already indicated that they believe in the principle of equal pay for equal work.

Major Lloyd: Have the representatives of the Government had no instructions whatever?

Mr. Robens: No, Sir, not yet. I am at the moment busy drafting those instructions.

Oral Answers to Questions — SCOTLAND

Herring Fishing Boats (Grants)

Mr. John MacLeod: asked the Secretary for Scotland under what circumstances fishermen are now eligible for grants under the Herring Industry Act, 1944, towards the cost of constructing herring fishing boats.

The Joint Under-Secretary of State for Scotland (Mr. Thomas Fraser): Grants may be made on the recommendation of

the Herring Industry Board in accordance with the arrangements approved by the Treasury. Applications are considered in the light of the individual circumstances, and also of the prevailing conditions in the fishing industry. For some time grants have been given only in exceptional cases.

Mr. MacLeod: Have the Government altered their policy here? Are they not giving grants when they would have given grants a few months ago?

Mr. Fraser: That is so, because the prevailing conditions in the industry have changed somewhat between the two periods.

Lobsters (Stock Conservation)

Mr. Grimond: asked the Secretary of State for Scotland how far, before making the Order forbidding the taking of lobsters in spawn, he consulted fishermen's organisations; and how far other methods of conserving stocks were considered.

Mr. T. Fraser: Four associations of fishermen in Scotland were consulted before the Order was made. Besides prohibiting the taking of lobsters carrying spawn, the Order increased from 8 in. to 9 in. the minimum length of lobsters which may be landed. Other methods of conserving stocks were considered impracticable.

Mr. Grimond: While appreciating the need for conserving stocks and the rather difficult nature of this problem, will the Minister bear in mind the considerable hardship that these people are likely to suffer under the Order? Can he tell us what evidence he has that stocks are being seriously depleted at this moment?

Mr. Fraser: There is evidence of stocks falling in some of the lobster fisheries. We had recommendations as long ago as 1946 from the Neven-Spence Committee in favour of imposing this restriction. There is no other way of imposing restrictions and saving stocks than the making of this Order.

Mr. Malcolm MacMillan: While certain organisations may have been consulted, is the Minister aware that in the north-west of Scotland and in the Islands, where a large number of lobsters are


caught, there was no consultation of any kind? In that area, so far from there being a depletion of stocks, the industry has been almost overwhelmed. Will the Minister reconsider this matter again, because it concerns the livelihood of those people?

Mr. Fraser: We can only discuss these matters with associations. If individual fishermen in particular parts of the country are not members of an association it is impossible for us to consult them.

Sir Harold Roper: What steps have been taken to ensure that French fishermen do not come and lift the lobsters around the Cornish coasts?

Mr. Fraser: That is another question.

Sir David Robertson: Are any lobster fishermen members of the association which the Minister's Department has been consulting?

Mr. Fraser: I should imagine that some of the lobster fishermen are. I imagine that a large number of the crofter fishermen are not members.

Mr. John MacLeod: Is the Minister aware that many fishermen on the west coast tell me that this Order means that they will have to go out of business?

Mr. Fraser: I think they are a little early in deciding that they are going to be put out of business by the operation of the Order.

Sir William Darling: Does the Minister take no cognisance of individuals? Must they join associations before he will listen to them?

Mr. Fraser: Not at all, but for consultation they must join an association. We cannot consult all the lobster fishermen in Scotland.

Fishing Industry (Sisal)

Mr. Emrys Hughes: asked the Secretary of State for Scotland what reply he has sent to the complaint made to him by the secretaries of the Clyde Fisheries Association concerning the recent rise in the price of sisal from 75s. 3d. to a new peak price of 292s. per cwt., and of the difficulties this has caused to fishermen and to the herring industry.

Mr. T. Fraser: Prices of ropes are kept under review by the Central Price Regulation Committee but the Government have no control over the price of raw sisal. Special arrangements have been made for the release of 4,000 tons of manila for the fishing industry. Manila ropes should be available to fisherman in July at prices below the current price for similar sisal ropes, and as they have an appreciably longer life the effective cost to the fishermen should be substantially reduced. I am writing to the association more fully in this sense, and I am sending my hon. Friend a copy of my letter.

Mr. J. J. Robertson: Can the Minister not take steps to see that adequate manila rope is allocated to the Scottish inshore fishing fleet?

Mr. Fraser: I will note the representation.

Lady Tweedsmuir: Can the Minister say what the price of the manila rope will be?

Mr. Fraser: I could not, offhand.

Mr. Henderson Stewart: Since the amount of manila rope to be made available will be rather small, is it not time, in view of the fact that sisal rope has increased in price five times in the last few years, to consider a subsidy for this essential part of the fishing industry?

Mr. Fraser: We note again this appeal for a subsidy from the other side of the House.

Squadron Leader Kinghorn: Will the Minister see that the English fishing fleet gets a fair share of manila rope?

Mr. Speaker: Scotland is certainly getting a fair share of Question Time today.

Harbour, Maidens

Mr. Emrys Hughes: asked the Secretary of State for Scotland what decision he has come to about the provision of the new harbour for Maidens, Ayrshire.

Mr. T. Fraser: This case is still under consideration. In recent discussions, representatives of the county council agreed to reconsider their contribution towards the cost.

Mr. Hughes: How long has this matter been under discussion? Is there any prospect of it materialising into something definite?

Mr. Fraser: The discussions have gone on for a long time, and different schemes have been considered from time to time. The present scheme is one that we think should be carried out as soon as possible. It is only a question of adjusting with the county council what contribution they are to make, and then for the Development Commissioners to make up their minds whether they can support it.

Nurses (Pay)

Major Lloyd: asked the Secretary of State for Scotland what progress has been made in fixing national scales for trained nursing staffs in children's homes, in view of the awards which have been made during the past two years to trained nursing staffs in other establishments which had retrospective effect to 1st February, 1949.

The Joint Under-Secretary of State for Scotland (Miss Herbison): The Nurses and Midwives Whitley Council are at present considering a claim for revised salary scales for nursing staff employed in day and residential nurseries and in nurseries attached to institutions. Any scales agreed as a result of these negotiations will no doubt influence the salaries to be paid by the local authorities to trained nurses employed as such in their children's homes.

Major Lloyd: Is the hon. Lady aware—I suppose she is—of the very considerable dissatisfaction among the staffs of the various children's homes throughout Scotland at the great and substantial differential between their remuneration and that which has been granted by the Whitley Council to the staffs of hospitals for children? Can she use her influence to see that the differentiation is reconciled.

Miss Herbison: I am aware of the dissatisfaction among this body of workers, but the Secretary of State has no power whatever to prescribe rates or scales for them. We hope that the negotiations that are going on will be settled quickly by the Whitley Council and that the local authorities will follow immediately.

Building Licences

Mr. Steele: asked the Secretary of State for Scotland if he will consider the practicability of granting building licences to tenants of local authority houses who wish to build houses for their personal occupation and so make additional houses available for needy families without any burden on public funds.

Mr. T. Fraser: My right hon. Friend is prepared to agree to the granting of building licences for new houses to local authority tenants where this will release a house for another family on the waiting list. It is proposed to tell local authorities that for this purpose they may issue licences, provided they keep within the total allocations of houses already made to them.

Mr. Steele: While thanking my hon. Friend for that encouraging reply, may I ask him whether this proposal will mean an expansion of private building or whether it will be done under the present allocation?

Mr. Fraser: I am obliged to my hon. Friend. We have in mind that the licences for these houses may be granted outwith the restriction to one in 10 imposed for the categories announced some time ago.

Lord Dunglass: Does not the Minister find it very satisfactory that, after a little more than a year, the hon. Member for Dunbartonshire, West (Mr. Steele) has been converted to Unionist policy?

Maternity Services

Mrs. Jean Mann: asked the Secretary of State for Scotland (1) to what extent, in his consultations with local authorities on midwifery services, he urges the full implementation of the Scottish (Midwifery) Services Act, 1937, which provides a complete service of doctor, obstetrician, where necessary, and midwife; or if he is satisfied with a substandard midwifery service consisting of midwives and machines only;
(2) how many local authorities are now providing a complete and comprehensive midwifery service, as provided in the Scottish (Midwifery) Services Act, 1937; and how many have provided a sub-standard scheme of midwives only.

Miss Herbison: The main provisions of the Maternity Service (Scotland) Act, 1937, were superseded by the National


Health Service (Scotland) Act, 1947. The services of general practitioners and specialist obstetricians are now provided under arrangements made by executive councils and regional hospital boards, respectively, and the responsibility of local authorities is limited to providing the services of midwives and ancillary aids.

Lady Tweedsmuir: Can the hon. Lady say what proportion of these midwives are equipped and trained to administer analgesia if necessary?

Miss Herbison: That is another question, and I could not answer it without notice.

Mrs. Mann: Can my hon. Friend give the percentage of cases in Scotland where both doctor and midwife were present, and the percentage where the midwife only was present?

Miss Herbison: In about 94 per cent. of the cases in 1950 both doctor and midwife were concerned.

Sir H. Williams: What are the ancillary aids to a midwife which the hon. Lady mentioned in her answer?

Miss Herbison: If the hon. Member had been here last Tuesday he would not have had to put that question. These aids are gas and air machines, trilene and all sorts of things like that.

Aged and Infirm Patients (Beds)

Mr. Manuel: asked the Secretary of State for Scotland what is the number of beds available in Scotland for aged and infirm patients; and the total number of beds which would be necessary to accommodate adequately the above patients.

Miss Herbison: Five thousand nine hundred and thirty-six beds are available in local authority establishments for the care and attention of aged and infirm persons, and 3,000 additional beds in voluntary and private establishments. Local authorities have estimated future needs as 5,600 additional beds.

Mr. Manuel: I thank my hon. Friend for her answer, but is she aware that it gives rise to another question? For many years there has been a definite shortage of beds for aged and infirm people. Will she arrange some consultations between

the local authorities and the regional hospital boards in those areas so that beds may be made available to enable the old people to have the attention they require?

Miss Herbison: I understand that there is always consultation between those bodies. We are always worried about the numbers of old people who cannot find beds, and I assure my hon. Friend that we are doing all that we can.

Lieut.-Colonel Elliot: Does the hon. Lady realise that this is a matter of great urgency? Frankly, there is not a single hon. Member for Scotland who has not had some very painful cases of old people who are not able to get into hospitals just now, and it is an increasing difficulty.

Miss Herbison: I can assure the right hon. and gallant Gentleman that this is not something new in Scotland, and that right from the beginning we have considered this as a matter of great urgency.

Mr. Carmichael: Can my hon. Friend state how many authorities are meeting the requirements and give the names of the authorities who are not so far facing up to this very serious responsibility?

Miss Herbison: I could not give those facts without notice. I can say that, besides the accommodation already provided, an additional 30 homes to provide accommodation for another 790 persons are under consideration.

Lieut.-Colonel Elliot: Does not the hon. Lady admit that this is becoming much more serious than it has previously been, and that it is much more serious under the regional hospital boards than it was when it was the responsibility of the local authorities?

Miss Herbison: I should in no way accept the suggestion made by the right hon. and gallant Gentleman.

Lieut.-Colonel Elliot: Then perhaps the hon. Lady will ask the Medical Officer of Health for Glasgow.

Mr. Speaker: I feel inclined to suggest that Scottish Questions should go to the Scottish Grand Committee.

Lieut.-Colonel Elliot: On a point of order. We have only just reached Scottish Questions. Half an hour was taken for the first 14 Questions. I do not think


it can be said that these important Scottish Questions are being unduly prolonged.

Mr. Speaker: I have forgotten how many Scottish Questions we have had, but each one has taken a tremendously long time. After all, Scotland is only part of the United Kingdom.

Mr. Carmichael: Further to that point of order. It should be understood in the House that Scotland has only one Minister to answer for seven or eight Departments—[HON. MEMBERS: "Three Ministers."]—whereas every Department in England has its separate representative in the House. I say that we are entitled to protest that we are not getting our full share.

Mr. Speaker: That is not a point of order for me. It is a matter for the Government.

Mr. M. MacMillan: English Nationalism!

Specialists

Mr. Manuel: asked the Secretary of State for Scotland what was the number of specialists in the Health Service in Scotland on 31st December, 1949, and 31st December, 1950, respectively.

Miss Herbison: The numbers on these dates were 928 and 993, respectively.

Hearing Aids (Repairs)

Mr. Manuel: asked the Secretary of State for Scotland what measures he is taking to have hearing aids sent for repair returned to users earlier than is now the practice.

Miss Herbison: The exact arrangements for the repair of hearing aids vary at different centres, and if my hon. Friend has any particular case in mind I shall be glad if he will let me know.

Mr. Manuel: Is my hon. Friend aware that many hon. Members on this side of the House have instances of hearing aids taking four or five months to repair? Is my hon. Friend aware that old persons who have had the advantage of a hearing aid feel it very badly, being of an advanced age, when they have to wait for its return? Would it not be most beneficial if something could be done to get repairs carried out quickly?

Miss Herbison: Most of the clinics carry out their own minor repairs, although a few send them to the regional centre. Where a major repair has to be carried out, the instrument has to be sent back to the manufacturer, and in these cases a new hearing aid is supplied. If my hon. Friend will send me particulars of any cases in which a repair has taken four or five months I will look into the matter.

Lieut.-Colonel Sir Thomas Moore: As 2,000 hearing aids have already been returned as unsuitable, cannot the hon. Lady say how long it is likely to take before the recipients can get new or repaired aids?

Miss Herbison: I do not know where the hon. and gallant Gentleman gets his figure of 2,000. It is true that a great many of these do need repairing, but we find that in most clinics the repairs are being carried out very quickly at present.

Allotments

Mr. Malcolm MacPherson: asked the Secretary of State for Scotland what information he has about the extent of the unsatisfied demand for allotments.

Mr. T. Fraser: The latest complete information on this question is contained in returns made by local authorities for the year ended on 30th April, 1950. These returns indicated that only in six areas were there outstanding applications for allotments. In four of these areas the outstanding applications totalled 259. In the other two areas no numbers were returned.

Policy Parks (Re-seeding)

Mr. Malcolm MacPherson: asked the Secretary of State for Scotland in what sense the interests of good husbandry are served by the re-seeding to permanent pasture of ploughed-up policy parks.

Mr. T. Fraser: The practice of re-seeding to pasture land which has been through a course of cropping is a recognised method of maintaining fertility and keeping land in good heart. The question whether such pasture should be permanent or temporary can only be decided in relation to the particular circumstances of any specific piece of land.

Mr. MacPherson: In view of the decline in the tillage area and in the rotational grass area and the Department's continual insistence on an improvement in the tillage area, does not my hon. Friend consider that it is necessary to make some inroads on the already large permanent grass area?

Mr. Fraser: Yes, indeed, Sir. Considerable inroads have been made upon the permanent grass areas, and policy parks have to make their contribution, but each individual case has to be considered on its merits and in relation to the agricultural land of which it forms a part.

Teachers (Training Committee)

Mr. Malcolm MacPherson: asked the Secretary of State for Scotland of how many members the National Committee for the Training of Teachers at present consists; and how many of these are or have been teachers.

Miss Herbison: There are 45 members, who, by the minute of constitution, must be elected from amongst the members of the education committees of the education authorities. So far as I can ascertain, five of the 45 are or have been teachers.

Mr. MacPherson: Does my hon. Friend consider this to be the correct proportion?

Miss Herbison: The National Committee meets formally only once a year. Its work is really carried out by the Central Executive Committee. All the members of the Central Executive Committee do not come from the National Committee. There are on the Central Executive Committee 21 members, two of whom must be teachers. At the present time I understand that another five members are, or have been teachers, so that one-third of the members of the Committee which really does the work are teachers.

Sir H. Williams: On a point of order. The last three Questions have been asked by a Parliamentary Private Secretary. [HON. MEMBERS: "No."] Is not that a little undesirable? Why cannot these matters be settled in the office?

Mr. Speaker: I did not hear what the hon. Member said, but I am sure it was not a point of order.

Egg Production

Mr. Grimond: asked the Secretary of State for Scotland whether, in view of the statement in the recent White Paper on the Annual Review of Farm Prices that there is a surplus of eggs at a certain time of year, he will make it clear that it is not the policy of the Government to reduce egg production in this country.

Mr. T. Fraser: As is made clear in the recent White Paper on the Annual Review and Fixing of Farm Prices, 1951, the Government still want the high level of egg production already reached to be maintained, and it is hoped by widening the difference in seasonal prices to spread production more evenly throughout the year.

Mr. Grimond: Will the hon. Gentleman agree that this spring, at any rate, there is a large unsatisfied demand for eggs and a falling off, which I think has taken place in egg production, which is very serious?

Mr. Fraser: This, of course, has been a bad spring, but I think the general policy explained in the White Paper is one which is acceptable to hon. Members in all parts of the House.

Mr. Snadden: Is the hon. Gentleman aware that there is already evidence of a very decided tendency to discourage egg production because of the recent price variations announced by the Ministry of Food? Will he say whether the Department were properly consulted before these prices were fixed, because otherwise we shall get few eggs next year?

Mr. Fraser: Of course the Departments were fully consulted. I do not know from where the hon. Member gets his evidence about there being discouragement in egg production at the present time.

Major Legge-Bourke: May I ask if the hon. Gentleman, before drafting his reply, had consultation with the Minister of Agriculture, or was it only a few minutes ago on the Government Front Bench?

Mr. Fraser: I do not know what is the relevance of that comment. The Secretary of State for Scotland is responsible for the administration of these matters in Scotland, but of course we have discussion with the Minister of Agriculture.

Mrs. Mann: Will my hon. Friend say when there is likely to be a surplus of eggs in Scotland, and will they be sent to Edinburgh, or to the Scottish Grand Committee?

Oral Answers to Questions — LIMBLESS EX-SERVICE MEN (CLAIMS)

Sir T. Moore: asked the Minister of Pensions what action he proposes to take in regard to the claims made by the British Ex-Service Men's Association for a reassessment of their pensions and those of their families on death.

The Minister of Pensions (Mr. Isaacs): I would refer the hon. and gallant Member to the reply I gave to my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) on 17th April. The substantial improvements in the war pensions provisions which I then announced had full regard to the claims made by all the ex-Service organisations, including the British Limbless Ex-Service Men's Association.

Sir W. Darling: On a point of order. At the conclusion of the Scottish Questions I noticed that nine Scottish Members had asked Questions. In your opinion, Mr. Speaker, does that seem excessive in view of the fact that there are 71 Members representing Scotland?

Oral Answers to Questions — SOUTH BANK EXHIBITION (SEASON TICKETS)

Mr. Eric Fletcher: asked the Lord Privy Seal if he will make arrangements for the issue of season tickets covering a number of visits by the same individual to the South Bank Exhibition.

The Lord Privy Seal (Mr. Stokes): Yes, Sir. The Festival Office have decided to make available as soon as possible monthly and weekly season tickets. These tickets will admit to the South Bank Exhibition, the Exhibition of Science and the Exhibition of Architecture and will be obtainable from the Advance Ticket Office in Whitehall Place by personal application, or by post. Full details will be announced by the Festival Office shortly.

Mr. Fletcher: Is my right hon. Friend aware that that statement will be very much appreciated, particularly by people in the London area?

Oral Answers to Questions — BRITISH ARMY

Forms and Returns

Brigadier Smyth: asked the Secretary of State for War whether, in view of the present shortage and cost of paper and the necessity of staff and regimental officers having time for training themselves and their troops, he will take urgent steps to reduce the number of forms and returns for which his Department is responsible.

The Secretary of State for War (Mr. Strachey): This is already in hand. One hundred and fifty returns have already been cancelled.

Brigadier Smyth: Does the right hon. Gentleman realise that this problem of forms and returns places a very great burden on the unit and that if he could relieve commanding officers a little in this respect he might lose a certain number of nuts and bolts, but the net gain in economy and efficiency would be tremendous?

Mr. Strachey: I quite agree, and we have just appointed a Controller of Army Statistics.

Brigadier Smyth: While realising that it has been a good move to appoint a controller at the War Office and in the commands, which has relieved matters to a certain extent, things are by no means right and a great many people feel that if these forms increase the CO. will no longer be able to train his unit efficiently. Surely the right hon. Gentleman will bear that matter in mind?

Troops, Korea (Personal Expenses)

Mr. Arthur Lewis: asked the Secretary of State for War whether he is aware that troops on active service in Korea are having to pay from 1½d. to 4½d. per tablet more for washing soap than at home; 7d. to 9½d. per quarter pound more for tea; 6d. more for fruit and cordials; from 4d. to 9d. a tin more for milk and on almost all types of goods purchased for personal use are having to pay at high rates; and, in view of the unrest caused to the troops and their relatives at home, what action he proposes to take with a view to reducing the prices of these commodities.

Mr. Strachey: Prices charged by N.A.A.F.I. in Korea are naturally in line with other Far Eastern prices. In some


cases they are higher than prices in the United Kingdom, but in other cases they are lower, for instance cigarettes are 11d. for 20 in Korea as against 3s. 6d. in the United Kingdom, matches 1d. in Korea as against 2d. in the United Kingdom, toothpaste 1s. 4d. in Korea as against 1s. 6d. in the United Kingdom.

Mr. Lewis: Whilst it is nice to hear that some of the prices are lower, does not the Secretary of State feel that all these prices should be at least on the level charged here, or lower? Will he ask N.A.A.F.I. to subsidise the higher prices out of the huge reserves they have accumulated?

Mr. Strachey: I have a table of all the principal items before me, and I should have thought that if a statistician compiled a cost of living index figure it would show that certainly Korean prices were not higher than in the United Kingdom. N.A.A.F.I. only accumulates surpluses which are used either in the units or as N.A.A.F.I.'s contribution centrally to Army charities, and the like. I should have thought it very difficult to ask them to subsidise these prices.

Brigadier Head: But is the right hon. Gentleman aware that N.A.A.F.I. themselves admit that for certain articles their prices are high, but their excuse for that is that they have been instructed in Korea to charge Hong Kong prices and the troops in Korea do not have Hong Kong allowances and this anomaly has continued for some months?

Mr. Strachey: It is not a question of instructions. N.A.A.F.I. are charging Far Eastern prices in relation to their area. There is another Question on local overseas allowance on the Order Paper for later on.

Mr. Driberg: Although my right hon. Friend points out that there is another Question, could he say now what reasons the commander on the spot, when he communicated with him about this matter, gave for his view that these N.A.A.F.I. prices did not justify a local overseas allowance?

Mr. Strachey: I cannot give the commanding officer's answer in detail, of course, but he pointed out for one thing that N.A.A.F.I. prices are only one part and not the principal part of the soldier's expenditure.

Sir H. Williams: What is the rest?

Mr. Strachey: His general expenditure.

Mr. John Paton: May I ask my right hon. Friend if he will publish the full list, to which he has referred, in the OFFICIAL REPORT, so that hon. Members can read it?

Mr. Strachey: That has already been done.

Mr. Lewis: The Secretary of State said that the troops are paying higher prices for some of their goods, does he not think it wrong that the troops in Korea should have to pay any higher price for any goods at all? Is it not about time something was done to see that the troops get all these goods at least at the price their relatives pay here?

Mr. Strachey: It is perfectly true, as my hon. Friend says, that they are paying slightly more for soap, for example, but they are paying very much less for cigarettes, and I should not have thought that that shows any hardship on the troops. It would be possible to bring up the price of cigarettes to the United Kingdom and to bring the price of soap down, but I should not have thought that an advantage.

Miss Burton: asked the Secretary of State for War if he has considered the representations, a copy of which has been sent to him by the hon. Member for Coventry, South, from soldiers in Korea on the subject of his decision not to issue a local overseas allowance to troops in that theatre; and, in view of these representations and of the strong feeling aroused both in this country and Korea, if he will reconsider that decision.

Mr. Strachey: I have considered these representations, but I must emphasise that local overseas allowance is designed to meet any overall extra expenses of living in an overseas station above similar expenses in the United Kingdom. Careful and sympathetic investigations have revealed that there is no case for such an allowance in Korea.

Miss Burton: While assuring my right hon. Friend that both I and the men who have written to me from Korea realise that no one is more anxious than he that justice should be done in this matter—[Laughter.] I have obviously had more letters than Members opposite


on this subject. Would not my right hon. Friend agree that the most important thing is that the men in Korea should themselves believe this decision to be fair, and would he therefore consider publishing in the OFFICIAL REPORT a list of prices obtaining both in Hong Kong and in Korea so that the men may themselves see on what basis it is not justifiable that an additional allowance should be made to them?

Mr. Strachey: One such list has been published, but we could, I think, publish another.

Brigadier Smyth: In view of the number of complaints that we have continually about Korea—the loss of allowances, high prices and so on—would not the right hon. Gentleman start to err on the side of generosity where our troops in action are concerned and make economies in other directions?

Mr. Strachey: The hon. and gallant Member knows that what we have done is to ask the local commander whether he can give us a case for a local overseas allowance, and he says that he cannot do so.

Mr. Driberg: Since my right hon. Friend has agreed to publish in HANSARD the comparative list of N.A.A.F.I. prices, would he also publish a list of what he regards as the other main items of expenditure, outside the N.A.A.F.I., that the troops have in Korea?

Several Hon. Members: rose—

Mr. Speaker: I called attention during Scottish Questions when about five Members were rising to ask supplementaries, but England, I am sorry to say, is just as bad. If we have lots of supplementaries, we have very few Questions and that is what we are having today.

Colonel Gomme-Duncan: On a point of order, Mr. Speaker. May I point out with great respect that Scotland is just as interested as England in Army Questions?

.280 Rifle

Brigadier Clarke: asked the Secretary of State for War if he will postpone production of the.280 rifle in view of the shortage of raw materials and the fact that more than adequate stocks of.303 rifles and ammunition exist in stock.

Mr. Strachey: No, Sir.

Brigadier Clarke: Is the right hon. Gentleman satisfied that this is the right time to change over from the.303 rifle, in view of the shortage of manpower, the shortage of materials and the fact that this rifle is a very good one and we have it in very good quantities in this country—about the only thing we have in good quantity?

Mr. Strachey: Yes, Sir, I am satisfied about this rifle. The present one, although a good one, was introduced in 1902, and the time does come when it is necessary to replace obsolescent weapons by more up-to-date weapons.

Mr. A. R. W. Low: Will the right hon. Gentleman agree that the most important consideration here, out of a great many considerations—standardisation and shortages of manpower and materials are two important ones—is for the infantry soldier to have the best weapon available, and will the right hon. Gentleman get on and produce that weapon as quickly as possible?

Mr. Strachey: I have very much more sympathy with that demand than the other.

Mr. E. L. Mallalieu: Will my right hon. Friend take note of the fact that this is the third time the Opposition have attempted to deprive our men of the latest and best weapons and equipment?

Mr. Duncan Sandys: Can the Minister say whether the Dominion Governments are adopting this new type of rifle?

Mr. Strachey: It is too early to say that.

Colonel Gomme-Duncan: Will the right hon. Gentleman take note of the fact that the childish and ridiculous suggestion of the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) has no relation whatever to the facts?

Mr. Speaker: We cannot continue this throwing of bricks from one side of the House to the other.

Brigadier Clarke: Will the Secretary of State ensure that both kinds of rifle are not in issue at the same time?

Mr. Strachey: Of course, the new rifle cannot be produced in sufficient quantities to equip the whole Army in one month or anything like it.

Attestation (Liability)

Brigadier Clarke: asked the Secretary of State for War if he will arrange to bring Army Form B 271 A up to date, so that soldiers making their attestation may know their full liability for retention in the service.

Mr. Strachey: Yes, Sir. This is being done. In the meantime, instructions are being issued to the recruiting staff to ensure that the additional liabilities imposed by the Prolongation of Service Act are explained to all applicants for Regular engagements.

Brigadier Clarke: Does the Minister appreciate that the existing attestation form says that a man may be held to serve an additional 12 months in an emergency, that the man signs that form but now is referred to a 1939 order and is told that he can be held for 18 months or longer? Is not this dishonest? Surely in the last five or six years the form could have been changed?

Mr. Strachey: I think it is right that the attestation form should be changed, and it is being changed.

Major Legge-Bourke: Does the answer the right hon. Gentleman has just given apply to all three Services? There is some resentment at the misunderstanding which arose in other Services besides the Army.

Mr. Strachey: I was answering on behalf of the Army.

Bandsman (Gratuity)

Brigadier Clarke: asked the Secretary of State for War why Musician Wright, Royal Artillery, was paid a gratuity of £25 and was then subsequently forced to refund the money, details of which case have been forwarded to him.

Mr. Strachey: The hon. and gallant Member will now have received my hon. Friend's reply on this subject.

Brigadier Clarke: As a result of my representations, Musician Wright has now got his £25, but does the Minister realise that there are many other men who, having in their patriotism re-enlisted before 1st September, are entitled to this money? Will the Minister see that anyone who enlisted during a similar period gets his £25 gratuity.

Mr. Strachey: I cannot go into this case in detail. Of course, when a bounty is given for re-enlistment over a particular period, it must apply to that period, and there must be hard cases of persons who enlist either immediately before or immediately after that period. It cannot be extended.

Brigadier Clarke: Does the right hon. Gentleman realise that this man applied before 1st September, was subsequently attested after 1st October, was paid the money, and then it was withdrawn from him? Had it not been withdrawn from him the matter would never have come to light, and the other men who ought to get this payment probably would never have got it.

Divisions, Germany

Mr. Low: asked the Secretary of State for War what total number of British divisions it is proposed to have in Germany at the end of 1951; and how many additional divisions he plans to send there in existing conditions during 1952.

Major Legge-Bourke: asked the Secretary of State for War if he will make a statement regarding the number of divisions now planned for the British Army of the Rhine.

Mr. Strachey: At or about the end of 1951 it is proposed that there should be 4⅓ British Divisions in Germany. I cannot yet give details of our plans for 1952.

Mr. Low: Will the Secretary of State for War confirm the statement that he made when in Germany, that there is as yet no limit to the number of divisions that we have decided to send to Germany this year and that further divisions will be sent in the near future?

Mr. Strachey: Certainly. I was asked in Germany whether this was the limit of British divisions which would in any circumstances go to Germany. I said, and I repeat, that no such limit has been fixed.

Major Legge-Bourke: When the Minister says that there is no limit, in what circumstances does he mean that to apply? Does he mean that there is a limit as long as there are no open hostilities in Europe, or that there is no limit at any time?

Mr. Strachey: I must simply repeat my statement that these 4⅓ divisions of which I have spoken are not a fixed limit to the number of divisions which in unforeseeable circumstances would be sent to Germany.

Mr. Niall Macpherson: Would these divisions be at full strength?

Mr. Strachey: That is another question.

Mr. Sandys: Surely the right hon. Gentleman can say whether these divisions will be up to full war establishment, or whether they will include an element of German civilians?

Mr. Strachey: That is quite another question, but it is well known, of course, that our Forces in Germany do not include, but are served by, a considerable number of Germans in transport and auxiliary rôles.

Mr. Sandys: Surely it is not another question to ask whether these divisions would be capable of being employed at short notice on active service if required. That is the question, and surely the Minister could give us an answer.

Mr. Strachey: It is another question, but I am perfectly happy to give the answer that these divisions are capable of being employed on active service.

Brigadier Head: Does that mean that the essential rear echelons of these divisions, manned by Germans, will fight in the event of war?

Mr. Strachey: There is another Question on the Order Paper on that subject. I think I had better answer that then.

Mr. Julian Amery: While I appreciate that the Minister cannot give us the figures for 1952, may we take it that it is the intention of himself and of the Government to increase the number of divisions in 1952 over and above what they intend to be the total at the end of this year?

Mr. Strachey: I think we had better leave the matter exactly as I have said it, but no limit of 4⅓ divisions has been set.

Mr. John MacLeod: Would I be in order in pointing out that only nine Questions have been asked since the end of Scottish Questions?

Class Z Reserve

Mr. Butcher: asked the Secretary of State for War whether he has considered the hardship caused in the case of call-up of Class Z reservists who are engaged on work as producers, directors or production managers in connection with theatrical and cinematograph entertainments which have to operate to precise or contract dates; and whether in such circumstances those concerned can be given the option of taking their training at a convenient time.

Mr. Strachey: I cannot give a general undertaking of this nature, but I can assure the hon. Member that all aspects of appeals are given the fullest consideration before a decision is reached. I have explained the difficulties involved in changing the date of training in my reply to my hon. Friend the Member for Sheffield, Park (Mr. Mulley) on 17th April, 1951.

Orders of the Day — FINANCE BILL

Considered in Committee.

[Major MILNER in the Chair]

Clause 1.—(HYDROCARBON OILS, PETROL SUBSTITUTES AND POWER METHYLATED SPIRITS.)

3.30 p.m.

The Chairman: It might be helpful if I informed the Committee that on Clause 1 I shall have to rule the first Amendment to leave out subsection (1) out of order, as subsection (1) is really the only effective subsection. I do not propose to select any of the other Amendments to this Clause, but to invite hon. Members to make the points they wish to make on the Question, "That the Clause stand part of the Bill."

Captain Crookshank: It is rather a startling decision, Major Milner, if I may say so with respect, because the Amendments raise specific and quite different points. There is the point in the two Amendments to Clause 1, page 1, line 24, with regard to chairs for the disabled. There is the Amendment to page 1, line 24, dealing with the use of oil for industrial purposes, and there is the one to page 2, line 19, with regard to the use of oils in connection with testing aircraft.
We thought that specific and pinpointed debate might be of help to the Committee. However, you in your wisdom have decided not to select those Amendments, and therefore we cannot in the normal practice of the House discuss your decision. But you pointed out that you were not calling the first Amendment because it was out of order. With respect, may I put to you certain considerations on that point? I should have liked to do it on the others, but, out of deference to the normal procedure I cannot do so.
On the first point, I take it that, in announcing that it is out of order, you rely on the argument which is clearly stated on page 534 of Erskine May that, if a subsection is the material part of the Clause, it cannot be debated separately because, without that subsection, the Clause would not make sense. That is the gist of the ruling in Erskine May. Taking the argument at its strictest, we

could not quarrel with your decision, but I submit to you and to the Committee, in case consideration should go further later on, that this is the Finance Bill and that, in recent years, the practice on the Finance Bill has been much modified.
That Ruling has stood the test of time for a long while, but in November, 1947, this House of Commons altered Standing Order No. 86 to the effect that there is no debate now on any Budget Resolutions separately. There is the general debate on the last Resolution which covers the whole field and, as everybody knows, different speeches follow each other on different topics and there is never anything specific. We used to have that on the Report stage, but that has now gone. When we had it, of course it was possible to put down specific Amendments and get even more detailed debate than is permissible now.
What I want to put to you, Major Milner, is that, in view of that change in 1947, the Committee stage of the Finance Bill is the first effective time that the House in Committee has of discussing any details. Therefore, while we cannot quarrel with your decision when you rule it out of order, and while that may be so on the strict ruling now, would it not be possible to have such a discussion on details now, particularly as we had the debate last year on this very point? Of course, it may be that was a mistaken decision then, but we did have it, and we fortified ourselves by the hope that it would be possible today.
If you cannot rule otherwise than that it is out of order, of course we have to accept your view, but we would reserve our rights on some future occasion to see whether we cannot get this sort of detailed debate more effectively on the Committee stage of the Finance Bill, in view of the abolition of the Report stage of the Resolutions. One has to remember, when all is said and done, that Finance Bills are not discussed in another place even if they need to be altered purely for technically linguistic reasons. There is no possibility of alterations there, and the Report stage of the Finance Bill in this House is, like all Report stages, very circumscribed. So while you have given the Ruling that it is out of order, I wonder whether even now you would not be prepared, in the light of the situation, to reconsider this problem which, incidentally, will arise again on the next Clause.

The Chairman: I am indebted to the right hon. and gallant Gentleman and, frankly, I have some sympathy with the views he has expressed in that there has been a difference in practice in another respect. However, I do not think that really helps the right hon. and gallant Gentleman in the present circumstances. It is also quite true that last year I rather gave way to the blandishments of the right hon. and gallant Gentleman and his colleagues, and came to an understanding whereby I allowed the Amendment to subsection (1) to be called on the understanding that there was not a further discussion on the Question, "That the Clause stand part of the Bill."
Possibly I was wrong in coming to that decision, and as I have had to consider it again this year, I feel I must adhere to the strict rules of the House and rule the Amendment out of order. Of course, there will be a full opportunity on the Question "That the Clause stand part of the Bill" to make all the points which the right hon. and gallant Gentleman and his hon. Friends wish to make. I will certainly take account of what the right hon. and gallant Gentleman has said between now and another occasion, if it so happens that the same point arises again, because I think there is something in what the right hon. and gallant Gentleman has just said. For the moment, however, I must adhere to my decision and rule the first Amendment out of order.

Lieut.-Commander Gurney Braithwaite: May I very respectfully make a submission to you, Major Milner, with regard to the other Amendments which you have not selected? Where a Clause increases a tax, are there not ample precedents for Private Members seeking to move definitive Amendments excluding certain sections of the taxpayers? The precedent I would quote was in 1947, when the Tobacco Duty was raised and there was a Private Member's Amendment which specifically excluded old age pensioners from it. I also have in mind on this occasion the Amendment in the name of my hon. Friend the Member for Bridlington (Mr. Wood) to Clause 1, page 1, line 24, at end, insert:
except that in the case of hydrocarbon oils used for the propulsion of invalid chairs driven by disabled persons the rate of duty shall remain at eighteen pence a gallon.

The Chairman: I agree entirely with the hon. and gallant Gentleman that there are ample precedents. However, I am not ruling the other Amendments out of order; I am merely not selecting them, which is rather a different thing.

Mr. Jennings: Further to that point of order. Do I understand from what you have ruled, Major Milner, that there will be a full and broad discussion on the Question "That the Clause stand part of the Bill "?

The Chairman: Certainly, I have said that a full discussion will be allowed, so far as I am concerned, on the Question, "That the Clause stand part of the Bill," and hon. and right hon. Gentlemen can make their points on that Question.

Mr. Clement Davies: I understand, Major Milner, that you are ruling definitely that the first Amendment is out of order—that I can understand—but that, with regard to the other Amendments, for some reason or other you do not propose to call them. How are we Members to differentiate between the use of certain types of oil and the taxes which will be upon them? It may be that we are in favour of a tax upon certain uses but against others. The only way we could show that would be by inserting certain words which are proposed to be inserted by the Amendments we have put down. I do not understand, therefore, why those cannot be called.

The Chairman: It is perfectly true that we cannot have a Division on any of them but right hon. and hon. Gentlemen may put their points to the Chancellor in the debate on the Question "That the Clause stand part of the Bill." I would point out—I think I am right in saying this—that on previous occasions the same points have been raised, although I must not be drawn into argument as to the reasons for the selection or non-selection of Amendments.

Mr. C. Davies: If the only Question that will be before the Committee is to be "That the Clause stand part of the Bill," I would point out that it may be that we are in favour of certain parts of the Clause as against other parts, and the only way in which we can make that distinction clear is by words such as appear in the Amendments.

The Chairman: There is, of course, another stage of this Bill, and it will be a matter for Mr. Speaker to consider in his turn whether the Amendments should be selected or not. In that matter it is not for me to express any view.

Sir Herbert Williams: Surely it is quite unprecedented that a Clause of the Finance Bill is to be discussed without the chance of any consideration of any Amendment whatever. As the right hon. and learned Gentleman the Leader of the Liberal Party has said, there are certain issues which are quite separate from the general issue. We can talk for many hours, and I hope that in existing circumstances we shall, on the Question "That the Clause stand part of the Bill," but we cannot separate the general issue whether the Petrol Duty is to go up by a certain amount from the issue whether petrol used for particular purposes shall be treated differently from petrol used for ordinary purposes, which seems most extraordinary. This is creating an entirely new precedent in respect of the discussion of the Finance Bill.

Mr. Eden: I have no desire, nor have any of my hon. and right hon Friends, to challenge—we know very well that we cannot do so—the power of selection of the Chair, which is an old-established right of the Chair; but I should like to put to you, Major Milner, this submission. If I understood you aright, you said that one of the considerations that had been in your mind was the fact that these matters had been discussed last year. With all respect to the Chair, I would say that that really is not relevant to the decision which the Committee has to take. We meet every year in a set of circumstances entirely different from those of the previous year, and it would be most unfortunate if this Committee were ever to consider that what had happened previously in any way debarred us from discussing and voting on what is happening now.
There is another consideration I would put to you, Major Milner. It is true that, on the Question "That the Clause stand part of the Bill," the Committee can say what it thinks about the detailed application of any particular duty, but as the Leader of the Liberal Party said, we cannot express through the Division Lobby what we think. I suggest to you,

Major Milner, that that is a distinction of some importance that ought to be maintained.

The Chairman: I fully appreciate the arguments which the right hon. Gentleman has advanced, which are very weighty. I have, however, fully considered all those points, and in the exercise of such judgment as I have I have come to a decision for which I think there are good grounds, although, it being a matter of selection, I am unable to indicate what those grounds are.

Sir Ian Fraser: May I raise a slightly different point? You were good enough to say, Major Milner, that between now and next year the Chair would consider the powerful arguments that have been put as to the change in procedure in connection with the Budget Resolutions and how far that might affect the decision which you have now made. My only point is to ask whether you will give that consideration between now and the next Clause rather than between now and next year, so that the precedent that you have now established for our immediate discussions will not rule the whole of the proceedings of the next seven or eight days.

3.45 p.m.

The Chairman: I must, of course, be consistent. Clearly I cannot change my mind between Clause 1 and Clause 2, whatever views may be expressed. The considerations advanced by the right hon. and gallant Member for Gainsborough (Captain Crookshank) deserve consideration, but they deserve long consideration and not consideration on the spur of the moment. I feel, therefore, that I must adhere to my decision.

Mr. Pickthorn: With every respect to you, Major Milner, and with only less respect to you than to Mr. Speaker, may I refer to the last answer but two or three which you gave, when you suggested that this would again be a matter for the consideration of Mr. Speaker? May I ask two questions? The first is whether the whole of this intricate law of procedure about our financial processes is not designed to make sure that no charge shall either be put or kept upon the public without annual challenge? The second is whether the whole existence of the Committee of Ways and Means of


the whole House was not designed in order to make sure that such matters should be raised without there being any responsibility upon Mr. Speaker or any chance for him to exclude any such matter from the consideration of the House? That is why at this moment we are not in strict technical language the House but a Committee of the whole House. I respectfully put those two questions to you now.

Mr. Eric Fletcher: Before you deal with that point, Major Milner, may I put briefly two other considerations from this side of the Committee? First, is not the whole of this discussion entirely irregular in the sense that it is quite unprecedented, when you have given a ruling about which Amendment you propose to select or not to select—

The Chairman: May I dispose of that point at once? It is perfectly in order to make representations to the Chair on matters of order but not on the question of selection.

Mr. Fletcher: I was dealing with the question of selection. My other point concerns one which was raised by the right hon. and gallant Member for Gainsborough (Captain Crookshank) and others. They referred to the change in procedure which occurred in 1947 and suggested that that might have some bearing on the procedure at this stage. Surely the difference is that in 1947 the House quite deliberately decided to change the Standing Orders, and in view of the multiplicity of the stages in which the Finance Bill and the Budget Resolutions were previously discussed, it was decided to eliminate certain stages.
One of those stages was the discussion on Report of the Budget Resolutions. Nothing was said or suggested at that time to indicate that because that stage was to be eliminated there would be any change in the ordinary procedure whereby this Committee dealt with the Finance Bill. Therefore, would you bear in mind that, in considering whether you were correct or not in ruling the first Amendment out of order, the same procedure should be adopted now in regard to that Amendment as was adopted prior to the change which the House made in 1947?

The Chairman: I am much obliged to the hon. Gentleman. I have had all those

points in mind, but when a new argument which on the face of it seems worthy of consideration is advanced to me, from whatever part of the Committee it may come, I must necessarily give consideration to it. That is what will be done.

Mr. Charles Williams: I wonder whether I might, with great respect, ask you, Major Milner, if there is any precedent for not calling an Amendment on the details of a main Clause in the Finance Bill in which a very heavy increase of taxation is being imposed, and whether, if that is followed in the future—

The Chairman: The hon. Gentleman is now dealing with the question of selection, and he will appreciate that it is not competent for him to argue that matter.

Mr. Williams: I was not arguing about selection; I accept that; but I was about to ask how in future, where there has been an increase such as this, the Committee is to indicate whether it wishes to grant only half of the increase? How would it be possible for us to discuss that properly?

The Chairman: The answer to any question on order is that right hon. and hon. Gentlemen endeavour to put themselves in order in the future.
Motion made, and Question proposed, "That the Clause stand part of the Bill."

Captain Crookshank: I think the last quarter of an hour will have given us all a great deal of food for thought in the coming months with a view to our finding how best to discuss these matters of very grave difficulty and very serious importance.
Now we come to the first Clause of the Finance Bill which is designed to increase the revenue by some £35 million, and even in these days of great figures that is a sum of importance, to put it mildly. This Clause, as we are not discussing any Amendments today, sets out to increase the duty by 4½d. a gallon. It is interesting to look back. I do not want to detain the Committee very long, nor am I going into any part of the details about the separate uses of petrol, because the points which would have been raised on the Amendments will be discussed by other hon. Members who are fortunate enough to catch your eye, Major Milner.
I wish to take a rather broader view of the matter proposed here. Last year, when the Budget was opened and the proposal was made to increase the duty by 9d. the gist of the argument advanced by Sir Stafford Cripps was the need for the restriction of consumption and the conserving of dollars. In fact, what was being done, if the argument was correct, was what we always understood the Labour Party was against, namely, rationing by the purse. However, that was in the Budget Debate in April.
At Whitsuntide, before we came to the Committee stage of the Finance Bill, the Government did what was characterised, if I may use inverted commas, as "irresponsible" when my right hon. Friend the Leader of the Opposition suggested at the time of the General Election that it should be done; they de-rationed petrol. Therefore, the whole argument about restricting consumption went by the board. If the Government had wanted to restrict consumption, obviously the easiest way of doing it was by the rationing system. So in Committee last year the argument shifted away from that altogether, and the right hon. Gentleman who then led for the Government argued that the purpose of raising the Petrol Duty last year was to set off the remissions being made in other parts of the Budget—not the argument used when the Budget was introduced at all, but a nice convenient one then.
That being the background of the discussion last year when the duty was put up to 9d., I looked to see what arguments were supporting the case this time, and in the Budget speech of 10th April there were four. It is with them that I wish to deal, and I hope to receive some support from hon. Members in all parts of the Committee, because this is not particularly a party issue. It raises a very important economic matter on which I thought that in the past all parties had agreed. The four arguments this year were these. First, referring to the increase last year, the right hon. Gentleman said:
…in my opinion it was overdue."—[OFFICIAL REPORT, 19th April, 1951; Vol. 486, c. 863.]
That was the first argument. The second was that he had seen little sign of the damage which last year we alleged would follow the raising of the duty. The third

reason he gave was that he was satisfied that in the present circumstances there was good reason for a further contribution from this source. His fourth reason was that, even with the increased duty, as by this year's Budget, the price of petrol would still be lower—in some cases substantially lower—than in most European countries. Those were the four arguments—overdue; no damage as a result of the increase last year; present circumstances demanded it; and anyway, at the end of the story, it is cheaper than in many European countries.
Let me take the first argument. The right hon. Gentleman thought the increase last year was overdue and he saw no harm in raising the duty still further this year. That seems to be the most fantastic new theory of taxation ever evolved. What is the underlying thought if we accept it? It is that sooner or later everything should be taxed; nothing should ever be exempt. All we should do is wait our turn, sit quietly and wait for our turn to come round; sit patiently in the queue and meanwhile count our blessings if our turn has not come this year; and in due course the Chancellor will say, "Oh, that one is overdue; up it goes."
There is also something else to presuppose about it. We have argued—I will not say ad nauseam, because that would not be a polite thing to say about speeches made in the House—we have argued and have still failed to impress upon the right hon. Gentleman and his colleagues that there is no reserve of taxable resources in this country. He does not accept that. But this theory that we have only to wait our turn for the tax to go up when some particular impost is overdue does presuppose that there is always a reserve which can be drawn upon without doing anybody any harm. The fact remains that people who have tried to envisage the result of this extra 4½d. have said that out of the £35 million something like £30 million will be passed on to the consumer. That will be a very serious matter.
That is the first argument. It is ridiculous, this saying that any particular commodity is overdue for an increase in the tax upon it. When a British Chancellor says that, it must make his predecessors turn in their graves.
The second argument of the right hon. Gentleman was that he had seen very


little sign of damage as a result of the increase of 9d. imposed last year. Well, I should not like to call him "Little Johnny-Head-in-Air" but his is that sort of attitude. Does he really think that there has been no damage to anybody, and to the motoring industry in particular, by the increase in the duty which was imposed last year? Does he really think it makes no difference that in a period of less than 24 months the cumulative effect of the increase on existing licences, Purchase Tax and Petrol Duty has brought from the motor industry a revenue of £270 million—more than twice what it had been less than 24 months before?
Does he think that this great industry and the transport industry of the country can stand that sort of impost without suffering any damage at all? It is now generally accepted that the private motoring sector of the industry is some 15 per cent. Even if the fallacious theory held by so many hon. Members opposite that it is only wealthy people who have motor cars anyway is accepted, even then, at the end of the story, that covers only some 15 per cent. of the whole.
The right hon. Gentleman has seen little sign of damage. Has not he heard of increased bus fares? He does not have to use taxis, but other people have realised the increase in the taxi rates in London, and the increase in the provincial bus rates, whether the buses are privately owned or owned by a corporation. Has not he heard of the increased transport rates, or has he been asleep ever since last year? The right hon. Gentleman is much too astute not to have noticed such things, and I cannot understand how in his Budget speech he could solemnly say that he has not seen any sign of damage.
Now we can see the effects of the 1950 rise. We can see, for example, that it meant a 4 per cent. increase in the operating costs of provincial omnibuses. That is some damage, surely. It has meant an increase of 5 per cent. in the costs in the London area. That is about 1d. per car mile, which is appreciable. And now, if we are to raise the duty by 4½d. more presumably, other things being equal, that will mean an increase of ½. per car mile over the 1d. Of last year in the bus world.
4.0 p.m.
Has not the right hon. Gentleman noticed that the Road Haulage Association put this increase of 4½d. which is to be imposed now as costing them, with their 120,000 vehicles, £3 million in the coming year; whereas British Road Services, with their 40,000 vehicles, have put their extra cost at £1,500,000. What is the result? The Road Haulage Association has recommended increased charges of 2½ per cent. as a result of this, over and above what has happened since the increase in 1950. British Road Services have not recommended a flat 2½ per cent. increase, but one of 2 per cent. for vehicles travelling under 40 miles and 3 per cent. for those travelling over 40 miles. That applies in the zones where they have complete monopoly, so they can do it just as they like, which is not surprising.
British Railways estimate the cost of this increase as £250,000. Last year it was £500,000. One could go on right through every industry which uses transport on the roads, and that includes every industry in the country. No damage? The meat traders say that this will cost an extra £250,000 in their line of business, and they do not get much meat to distribute either. The Coal Merchants' Federation say that this extra increase will cause an increase of 2d. a ton on the retail price of coal. The right hon. Gentleman must be horrified at the heights to which coal prices have gone since he left that Department, and now they are to rise by an extra 2d. per ton. Furniture removers say that there will be an increase of ½d. a mile in their case. The Ballast and Sand Association say that there will be an increase of anything up to 5d. per cubic yard. Building trades employers estimate that it may mean as much as an increase of £10 per local authority house. Birmingham Corporation Buses put their extra cost at £112,000.
No damage? These are increases over what happened last year. This really is a very serious matter. Nor can we possibly forget the major industry of all, the agricultural industry, which has had this extra addition to its costs imposed upon it after this year's February Price Review and the settlement of all the charges. If the right hon. Gentleman thinks that the last increase either has not done damage in the last 12 months or that the


increase this year will not cause damage, he reveals himself as living completely in the clouds.
Another item in his argument was that, at the end of the story, petrol would be substantially lower in price than in many other countries in Europe. When one is talking about organising a great transport fleet, or even buying a small secondhand car, one does not look at the cost of petrol and at nothing else. If one is talking about organising a form of transport or using it for oneself, obviously one sees what all the different costs will be before one can put that car on the road. One takes into account such questions as licensing duties, Purchase Tax, and so on. When one does that, one finds that the right hon. Gentleman's figure is right purely from the petrol point of view, but when taking the cost of running figures, whether it is for big transport or for a small car, the cost in this country is higher than that in any other country in Europe, with the exception of Spain. We must remember that this country, the United Kingdom, uses immeasurably more motor transport than any other country in Europe.
I notice that the hon. Lady the Member for Coventry, South (Miss Burton), looks a little sceptically at me. The cost for a 10 horse-power car doing 5,000 miles a year in this country is a great deal higher than the cost in any other country in Europe with the exception—and, knowing her views, I do not suppose she will mind about this one—of Spain. That is the only country where it is more expensive to motor than here. That is very strange.

Miss Burton: I was not looking sceptically at the right hon. Gentleman. I was merely surprised that he, when he had developed a very good case on his first two points, decided to go further. I thought that he was astute enough to realise, in developing his third argument, that it did not hold water at all because it introduced other considerations.

Captain Crookshank: That is the whole point. One has to introduce other considerations when talking about the damage or lack of damage done by the increased duty. That was argument number two—no damage

done. Then I come, quite logically, to the point that one has to take into account, when discussing the damage, all the costs of running transport as well as the petrol cost. While the right hon. Gentleman says that petrol is cheaper here than in the rest of Europe, the fact remains that, if we took at the figures for the whole of the taxation in all the countries of Europe, we have the highest, with the exception of Spain. Therefore, I do not think that that is a good argument for the right hon. Gentleman to put forward.
Then I come to his other point, because I have altered the argument to cover the last two together. The other argument was that he was satisfied that in our present circumstances there was a good case for a further contribution from this source to provide additional revenue. The words, "from this source" beg the whole question of the other three arguments. I do not think that they carry weight, but one has to consider the whole range of circumstances. In using those words, no doubt the right hon. Gentleman was thinking of the enormous burden which, through the defence programme, he was having to put upon the country. I also bear in mind the consideration that road transport, surely above all else, is the life blood both of the defence programme and of industry. It is the one industry which ought not to suffer specific imposts.
Surely, the whole idea is that one should move goods and people about in this country as cheaply as possible, and not use this industry as a source of revenue. I know that the right hon. Gentleman argued before, "Oh, yes, there always was a petrol tax." That is true. I concede that argument, but it does not follow that we all approved of it by any manner of means. There is a very big difference in the considerations which apply if we have a small tax and if we have a high tax.
A very small tax in a period like that when it was originally put on, when there were great reserves of taxable capacity, is quite different from putting on within 12 months 1s. 1½d. a gallon when we have no reserves. It is these present circumstances which are the very reasons this ought not to have been done. The right hon. Gentleman can argue about the defence programme. I put the question the other way. I say that the need for


cheap transport is paramount, and here we are deliberately forcing up its price.
I gather that the export market is still of interest to His Majesty's Government. We have to remember that, by the change in the horse-power tax, the manufacture of larger cars was made possible in this country in a way which was not possible before. Other hon. Members will develop this point, but I will put it briefly. The result was that in two years the export of cars of over 14 horse-power went up by 10 per cent., from 18 per cent to 28 per cent., which was a considerable increase; but if within 12 months the Government increase the Petrol Duty to the extent of 1s. 1½d. a gallon, it seems to me that they will bring back the very circumstances which originally induced the manufacturers to make the small car which was economical on petrol.
Therefore, just those firms which have been thinking of giving up the manufacture of the small car, because they were getting into the export market with the larger car, will, because no export market can survive without the background of a home market even if at the moment it is restricted, find themselves driven back into doing exactly what they did not want to do. To that extent, possibly, the right hon. Gentleman is making a worse job of the export of these motor cars than even he may fear in these circumstances.
I think that present circumstances are not a good case for a further contribution from this source. I think they prove exactly the reverse, unless, of course—I hardly dare whisper it—it was made to cover the curious fact that the £35 million required from this Petrol Duty is exactly the same amount as was lost by the groundnuts scheme. Without that disastrous venture, this £35 million would not have been required.

The Financial Secretary to the Treasury (Mr. Douglas Jay): The Financial Secretary to the Treasury (Mr. Douglas Jay) indicated dissent.

Captain Crookshank: It is no good the hon. Gentleman shaking his head; these are the figures. It is the cumulative effect of all these taxes which matter. Some people, even hon. Gentlemen opposite, may say "Well, 4½d. a gallon is not so very much, after all." But we had 9d. last year. It is like the people who say that the extra 6d. on the Income Tax is not very much. But we have had it at

9s. for a long time, and it is the cumulative effect that matters. I do not like using the old proverb about the last straw, but the right hon. Gentleman must be sure that there is a time rapidly coming when the last straw is going to make all the difference, and perhaps he is getting to that stage now. We shall certainly oppose this Clause when the Question is put.

Lieut.-Commander Gurney Braithwaite: When, a few minutes ago, the Committee was dealing with certain procedural difficulties, the right hon. and learned Member for Montgomery (Mr. C. Davies) pointed out that we are now confronted with what must be described as a bulldozer, and definitive objections cannot be taken through the Division Lobby. I think that all that remains is for those of us who object to this increased duty to indicate briefly, as we should on a Committee stage, those headings under which we believe this proposal to be objectionable.
I come first to its effect upon distribution. I submit to the right hon. Gentleman, and indeed to his hon. Friends who sit behind him, that this increased Petrol Duty is, in fact, a food tax, and a food tax of an onerous character which will reflect itself, without the slightest doubt, as the months go by. Then, I pass to the effect of this duty upon a section of the community with whom hon. Members on all benches have always had the greatest sympathy in their plight—the disabled ex-Service men who, as we all know, have small cars, invalid chairs and so on, which enable them to get about. I have no doubt that I shall be told by the Minister, or whoever replies to the debate, that their consumption of petrol is infinitesimal. That may be so, but it is the section of the community upon whom the very slightest increase in the cost of living falls particularly harshly.
I submit to the right hon. Gentleman—because it is he whom I am addressing, and not the hon. Member for Bermondsey (Mr. Mellish), who is not yet in charge of the Finance Bill—that he might do well to study the discussions which we had in 1947, when the increased Tobacco Duty—a very sharp increase it was that year—fell with great severity upon the old age pensioners, and how representations were made to the Minister of Local Government and Planning, who was then


in charge, and not from these benches alone. The right hon. Gentleman was strongly pressed by his own supporters—and the hon. Member for Sparkbrook (Mr. Shurmer) was one of them—and, as a result of the Committee discussions, which were later carried on into the Report stage, this matter was in fact rectified. Though it was not done for some months, it was rectified in the autumn of the year in which the impost was made.
4.15 p.m.
While my hon. Friend the Member for Bridlington (Mr. Wood) cannot move the Amendment that stands in his name, I hope we may hear from him later. If this cannot go into the Division Lobbies—and, had it been taken into the Lobbies, the consequences might well have been interesting—I feel confident that there is a strong feeling on both sides of the Committee that this matter should be re-examined in regard to this particular section of the community, and on that point the right hon. and learned Member for Montgomery was right. Whatever may be the feelings of hon. Members opposite about the Petrol Duty as a whole, here is one particular impact of it upon a small section of the community which I feel sure hon. Members would like to amend.

Mr. Mellish: As the hon. and gallant Gentleman has been developing the argument about disabled people, he might also remind the Committee that they get an allowance of £50, and that they received an increase from £45 to £50; and that, if there is any hardship, we should bear in mind what has already been done.

Lieut.-Commander Braithwaite: That was the result of the opportunity of debating the matter in detail a year ago in Committee, and the hon. Gentleman must know that these concessions, which really were of very small value, were the result of discussions on the increased duty which operated in the financial year 1950–51. We are now confronted with yet another increase for the year 1951–52, so that the case for a further concession is established out of the hon. Gentleman's own mouth. I hope we may have his support in the Lobby later on, if he really feels that way about it.
I pass from that aspect of the matter to a somewhat wider one, and here I frankly do not expect to carry hon. Members with me even an inch of the way. It deals with the "sacred cow" of Socialists—British Railways. As traffic has been more and more diverted to the roads, this increased Petrol Duty is once again a syndicalist action—that is how I described it a year ago—and is an attempt, by increasing the costs of road transport and distribution, to drive traffic back to the railways. But there is a bottleneck on the railways at this very moment. We have been reading about it. Many of the summer trains are to be taken off, and Messrs. "Biff" and "Buff" will have to revise their conversation. They were congratulating one another not so long ago on the prospect of the summer excursion trains. Messrs. "Biff" and "Buff" will have to take to the motor coaches—probably those operated by private enterprise—before the summer is out.
Here is a syndicalist action, and what now becomes of the invitation of the Minister of Fuel and Power to the public to stock up their coal supplies during the summer months? What is the Chancellor's contribution to the housewife's stocking up? It is to increase the cost of the transport of coal from the pit to the home. I wonder whether the Chancellor had a word with the Minister of Fuel and Power prior to taking that action.
This Budget, now taking statutory form, is one in which the right hon. Gentleman finds himself, in one of his perorations on that historic day, placing the burden on the shoulders of those least able to bear it. Is there no end to Socialist tyranny? Is it not worth while considering for a moment that even full employment has become short-time employment in many parts of the country, and that the right hon. Gentleman, by this petrol impost, is making it more difficult for our industries to compete in foreign markets? Has he seen the long faces of the taxi drivers during the last few days? They are the victims of this, and they are now experiencing a consumers' resistance of a most marked character. I know that taxi drivers hope that later on, as in the case of the Tobacco Duty, people will recover their taste for this particular luxury—for


that is what it is now—and will come back to them.
But the consumers' resistance experienced by the taxi drivers is, I submit to the right hon. Gentleman, only a pointer of a consumers' resistance which will spread into many parts of industry and into many sectors of popular demand. If he is wise, he will realise that if this Clause is steam-rollered through without a discussion of Amendments, or, perhaps, without a debate on many of its details, this is merely a pointer of what is likely to happen. By insisting on Clause I of the Finance Bill, the Chancellor is damaging his revenue, and taking the short rather than the long view for stimulating it.

Mr. David Renton: I am neither a financier nor an economist, but it is my duty to try to follow the Chancellor's reasons for his policy, and I must say that I am very puzzled by one matter in particular. The right hon. Gentleman made it plain to the House on an earlier occasion that he is anxious to close the inflationary gap and to mop up the inflationary pressure. He also made it clear that he was fairly confident of having a buoyant revenue and was not so deeply concerned about imposing new taxes merely for revenue-raising purposes.
His main anxiety, as I understand it, is to close the inflationary gap, and one of his reasons for imposing the increased duty under Clause 1 is to close that gap. If I am wrong about that, I hope to be corrected at once, but I do not think I am. I invite hon. Members, before passing this Clause, to consider and to answer in their own minds four questions which I think we must always answer for ourselves before we agree to any new kind of imposition. The first is, what purpose is it intended to have? Secondly, is that purpose necessary? Thirdly, what effect is it going to have? Fourthly, will that effect be beneficial or otherwise? Those are four very simple but important questions, and I propose to examine them briefly in relation to this new increase.
Let us assume, with regard to the purpose of this Clause, that it is intended to absorb surplus spending power and to reduce inflationary pressure. We can also assume, if we wish, that it is intended to raise revenue. Coming from a Socialist Chancellor of the Exchequer, that would

be quite natural, because such a Chancellor would never get enough of the people's money. But reverting to my main theme, the question of absorbing surplus spending power, we have to consider whether that purpose can really be fulfilled by means of a tax which is itself inflationary in effect. That is why I say that I am puzzled by the Chancellor's policy and look forward to some simple explanation of it. How does one absorb inflationary pressure and reduce it by means of taxes which, like this tax, will have the effect of increasing the price of petrol and oil, and, as my hon. Friends who have already spoken have shown, will increase, directly or indirectly, the cost of every item used in every household in the country? That is no exaggeration.

Mr. Crosland: May I put this question to the hon. Gentleman? Does he mean that no indirect taxation of any kind can possibly have any disinflationary effect at all?

Mr. Renton: I do not take that view at all, and I am glad the hon. Gentleman interrupted me to make that point. I think we must consider whether indirect taxes will inevitably have an inflationary effect, because they affect the cost of every necessary item, food, clothing, and all the necessities of life in the household budget of every family in the country; or whether, on the other hand, they have a somewhat different effect, namely, the absorption of purchasing power which can well be absorbed without increasing the cost of living to ordinary people; or, again, whether perhaps they have a general application, but affect not the necessities but the luxuries such, for example, as the duty on tobacco or the tax on beer, if one regards beer as a luxury and not as a necessary food. Does that answer the hon. Gentleman's question?
I say that this tax is inflationary and completely defeats the intention, if it be the intention, to make some contribution to mopping up the inflationary pressure, and that the Government must explain this matter if they want us to agree to this Clause. The effect upon transport has already been mentioned by my hon. Friends, and there is only one further point I wish to add to what they have said on that matter. It is that we are now faced with the position when the


nationalised railways and the nationalised Road Transport Executive ask the Minister to come to the House for approval to increase their charges on the ground, for example, that the cost of coal has gone up, or, to give another example, on the ground that the cost of petrol has gone up, and so on through the whole range of cases.
I wonder whether the good, honest folk throughout this land who voted Labour really expected that once a Socialist Government were in power, that Government would come to the House of Commons and ask for the cost of the services charged by one nationalised industry to be increased because the costs of another nationalised industry had also been increased with the help of a Socialist Chancellor of the Exchequer?

Mr. Monslow: Mr. Monslow (Barrow-in-Furness) rose—

Mr. Renton: I cannot give way to the hon. Gentleman because I do not want to make a long speech. Indeed, I never give way when I am myself puzzled, but only when I am clear about a particular point.
Therefore, that is another matter which I think calls for some kind of explanation by the Chancellor. How long is this policy to continue of the Government boosting up the costs of one service which it controls, or ought to control now that it is nationalised, and then boosting up the costs of another nationalised service? Is it their intention to check it at any stage; and, in particular, where the costs of any of these services are affected by the taxes imposed upon the whole community, is the Chancellor just prepared to let things take their course and to allow this inflationary process to go on in this manner?
There is not the slightest shadow of doubt that it is the services now controlled by the Government which are tending to increase inflation. I agree that the cost of imports is a very important factor, but I should be out of order if I went into that matter at this moment. As far as our internal costs are concerned, there is nothing more inflationary than the continual advances in the costs of the services of each of the nationalised industries. As my hon. Friends have shown, that inflationary process is greatly increased when added to it is the fact that

those services are the principal consumers of items such as petrol and oil.
4.30 p.m.
The major problem which the Government, and indeed, everybody in this country, now have to face is the problem of the increase in the cost of living lowering the value of the people's money. We have yet to see that the Government have the slightest intention of making a contribution, either themselves or through those services which they control, towards solving that problem. The Chancellor of the Exchequer has an opportunity, on the Question that this Clause stand part of the Bill, of explaining his policy and giving us some hope that perhaps his policy will be changed.

Mr. David Eccles: Like my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) and the hon. Member for Huntingdon (Mr. Renton), I am puzzled why the Government have put a tax on an essential raw material at this moment. After all, petrol is an essential raw material. They must think that in some way this extra 4½d. per gallon will help them in carrying out the defence programme.
I want to examine the relation of the tax to the defence programme. The situation, as I see it, is that, having decided to make no substantial economies in other parts of the Budget, the Chancellor has committed us to spend £900 million more this year than last year, and in a desperate search for revenue he has found that the Petrol Duty and the Entertainments Duty are two duties which have not yet reached the point of diminishing returns. Therefore, he says we ought to vote him this tax because it is at least one of which the yield has not yet reached the maximum. That is the Government's argument. They need the money for defence.
The argument might be convincing if we were entering upon re-armament from a very much lower level of taxation than we are and against a background of stable prices and with no fears about our ability to pay for essential imports. Had we those reserves to draw upon, then I would agree that it would be proper to finance re-armament by increasing taxation and not by insisting upon unpopular economies. But in fact re-armament begins when taxation in this country takes


a larger proportion of the national income than ever before in peace-time, when prices are rising and when the gap between the value of imports and exports has again grown alarmingly large. In these circumstances, to impose any new tax which gives a twist to the inflationary spiral may very well do more harm than good. This possibility should first be looked at from the point of view of the accounts of the defence programme.
The cost of re-armament which was written into the Budget was based upon estimates of wages, salaries and materials as at the beginning of this year. Since then prices have been moving upwards, and now we are faced with an all-round claim for higher incomes. That claim is not related to increases in output but is founded upon the rise in the cost of living. Anything which the Government may do to increase the cost of living must increase the pressure for higher incomes. If, therefore, the result of gathering in this £35 million from this Petrol Duty were to prove to be the last straw which broke the restraint, such as still exists, in asking for higher wages, salaries and dividends, we should have done the wrong thing, because on the other side of the Budget, the expenditure side, the cost of re-armament would increase not by £35 million but perhaps by £100 million or £200 million.
What we have to consider is whether this extra 4½d. per gallon is likely to prove a significant lever in hoisting up prices to dangerous levels and, therefore, making it certain that wage and salary increases and higher dividends are paid out. I cannot be certain about this. But it is not necessary to be able to measure accurately the inflationary effects of this tax to say that it is a bad tax. As the cost of living goes up month by month, the situation becomes so dangerous that it must be wrong deliberately and as an act of Government policy to add to the cost of an item like transport, which enters into the cost of re-armament both directly and indirectly through its effect upon other prices.
A rise in the price of petrol will encourage rises in the prices of other fuels and in other forms of transport which use those fuels. Today the whole complex of our prices is straining to break away, and is therefore exceedingly sensitive to any impulse in the fatal

direction. One would have thought that the Government would have resisted this tax at such a time.
I want to give two examples from my constituency of what is actually happening as a result of dearer petrol. During the last war several thousand people were drafted into North-West Wiltshire to work in an underground factory. They left their homes, and were accommodated in hostels and bungalows. Then, when later on the factory closed they could not get their homes back for reasons well known to hon. Members. Many of them have had to find work at considerable distances from where they are living in my division. That means high travelling expenses, and there has been for years a dispute between these people and the Ministers concerned about who should be responsible for these travelling expenses. Now comes this extra 4½d. per gallon. That is proving to be precisely the last straw which my right hon. and gallant Friend mentioned in his speech—a last straw in a process familiar to all hon. Members.
My right hon. and gallant Friend also mentioned the distributive trades. The effect upon them can be very clearly seen in my part of the world in the business of baking bread. Even before the Budget bakers were finding it difficult to make a living out of the controlled price of bread, so much had the costs risen. Since the Budget the point has been reached where bakers are actually going out of business altogether or confining themselves to the making of confectionery. That is a very serious thing in rural areas because it is not always easy to find an alternative baker in a country district.
What will now happen? The bakers will continue their argument with the Minister of Food and demand a higher price for bread, and in the statement of their case they are certain to include this extra 4½d. a gallon for petrol. Sooner or later the Minister of Food will have to give way. Is it not very unwise for the Government to have preferred to impose this tax, one of the results of which may well be that the price of bread will go up, rather than to have made economies in their own expenditure? I cannot imagine anything more inflationary than taxation which leads to an increase in the price of an article like bread.
Mention has already been made of the Government's statement that we need not worry about the increase in the Petrol Duty because certain foreigners are already paying more than 3s. a gallon. I have only one short observation to add to what has already been said about that. It takes a Labour Government to reduce us to the point where, instead of Britain leading the small nations of Europe, His Majesty's Ministers come to this Committee and almost apologise because they have not followed the example of Belgium and Luxemburg at an earlier date. That is an extraordinary argument to be used by Ministers who represent a trading country like ours. After all, here we are, 50 million of us, living on a narrow and damp island, closely congregated together, quite unable to earn a full supply of food and raw materials, except in open competition with the whole world.

Mr. Manuel: We have done very well.

Mr. Eccles: We have in the past done very well under private enterprise. One would imagine that right hon. Gentlemen opposite pay no attention to the fact that other countries, leaving aside the United States, where petrol is much cheaper than it is here, have many natural advantages which we have not got. Have they got no hydro-electric power? Have they not, in proportion to their population, sources of food and raw materials within their territories which we do not and cannot possess? If, therefore, we throw away all our natural advantages, or all those which we can contrive, and if we are to follow a policy which says that, wherever possible, we ought to raise one of our costs of production to their level, how are we to meet them in the industrial markets of the world? I wonder how long an industrial country can maintain its standard of life and its place in history if it is continuously governed by Ministers who take such a frivolous view of the importance of cheap and efficient production?
There was one other point in the Government's previous defence of this duty upon which I should like to add a few words to what my right hon. and gallant Friend said. Apart from these comparisons with what is happening in Luxemburg, a totally new principle of taxation appears from the defence of this Petrol

Duty put up by Ministers. Listening to their speeches, one sees that they hold, as a matter of doctrine, that an indirect tax like the Petrol Duty ought to be raised to and kept at the point of diminishing returns. I do not see how a Socialist could hold any other view. After all, believing, as he does, that the State spends money more wisely than the citizen, he is bound to push taxes to the point where the revenue itself would fall off if the rate were further increased. That is the logic of the Chancellor's and the Financial Secretary's description of this tax as being overdue.
Here we have imported into the British financial system a revolutionary conception. Up to 1945 it was a cardinal principle of public finance, held by both the Conservative Party and Mr. Gladstone's party, that the national welfare demanded that a reserve of taxable capacity should be kept in peace-time. It was held that the life of a nation and the life of an individual were similar in this respect; that both were wise to keep something for a rainy day. The study of history had taught our ancestors that the international weather is not always cloudless, that unexpected disasters do occur, and that even such things as foreign exchange crises demand sudden measures. For that reason they said: "It is right to have various reserves, and among those reserves none is more essential than a margin of taxable capacity."
4.45 p.m.
Now the Labour Party have shown us by their arguments on this duty that they do not believe in reserves of taxable capacity; they do not think that the Welfare State requires, as part of its apparatus for continuity and stability, a reserve of taxable capacity. When they are contemptuous, as Ministers have been, on this subject of a reserve of taxable capacity, it is as well to remember that there is no social security system for a nation. No other country owes us a living. We, as a nation, are in the position of a man who has not taken out and cannot take out any insurance. We have got to provide ourselves for our rainy days. It is curious to note that the Postmaster-General has lately tumbled to the fact that the Post Office will not run properly unless it, too, has some reserves, but that is not the view taken by the


party opposite in regard to the Welfare State.
That sharply distinguishes them from this side of the Committee, and I feel sure that Mr. Gladstone's heirs would agree with me in this; that is to say, without reserves the whole system of social security is endangered, and it can be maintained only when the weather is fair and the sea is smooth. The moment there is any kind of storm, without reserves the whole apparatus is endangered. This is a very real difference between us.
I am sorry to have detained the Committee so long in establishing my argument for what I consider to be the two overwhelming reasons this Clause should be rejected. First of all, it is wrong in conditions of rising prices to put a tax on the costs of production. There can be no doubt that to do so raises the cost of living. Secondly, it is wrong at all times short of war to exhaust the reserves of taxable capacity in our country.

Mr. Manuel: Will the hon. Gentleman clear up this point? The whole burden of his case is on the expenditure on the Welfare State. Has he examined the implications upon defence expenditure in the coming financial year? Why has he not given that its proper place in his argument?

Mr. Eccles: I am sorry, if the hon. Gentleman was not here when I began my speech, or if I did not make myself clear. I began my speech by suggesting that the effect of this duty upon defence expenditure will be to raise that expenditure, directly or indirectly, by more than the £35 million which the duty brings in. Therefore, on the narrow point of defence accounting, I consider this to be a thoroughly bad duty.
Those who vote for this duty tonight will be voting for a depreciation in our money. They will be voting to increase the cost of re-armament. And they will be voting to increase those hardships which accompany a rising cost of living, and which press most severely on those with large families and small incomes. Whatever may be the politics in this Clause, I think it must be offensive to the conscience of every one of us.

Sir I. Fraser: Last year we had a short debate on an Amendment, put down by myself and my hon. Friend, not to increase

the Petrol Duty in the case of disabled ex-Service men and women. A similar Amendment appears on the Order Paper again this year, but it has not been selected. I do not propose to go over the ground which was very adequately covered last year. However, last year the Chancellor of the Exchequer found him-self able to permit the Minister of Pensions to make grants which effectively carried out the intention of that Amendment.
The purpose of the Amendment was to prevent the additional duty upon petrol being passed on to a small group of disabled people who cannot afford to bear it. The arguments for selecting this group for this benefit are that they are peculiarly hit through no fault of their own, and that they have no means themselves of any redress except the kindness and understanding of Parliament and the benevolence of the taxpayer. These men are given motor vehicles because they have lost the independent power of locomotion, just as one might give a man an artificial leg because he has been deprived of his leg. One would no more think of taxing an artificial leg than flying, so why therefore should one tax the artificial method necessary to enable a person to become mobile?
Last year, when the Petrol Duty went up, we showed that the cost to these individuals who have small motor cars would be about £10 a year. The cost to those who had tricycles would be substantially less. The present duty does not rise by so steep an amount, and we estimate the cost will be about £5 a year. It might be said that £5 a year is a small amount and that we must all bear our taxes, but when the Chancellor was making his Budget speech he took great pains to point out that hundreds of thousands of wage earners would not find taxation rising by only £3 or £4. He pointed out with pride that, on the contrary, some of them, because they had a family of two or three, would find at the end of the year that their taxes were about £5 less. That seemed to him a very important argument. If that is so, this £5 to a select and maimed group of the community is an important item.
Secondly, all these men are disabled to the most severe degree, otherwise they would not have been selected by the Ministry of Pensions to have these


vehicles. Although a great many of them are employed—more than half I am glad to say—they have a great burden to bear, and they need these vehicles to go to their work. They cannot set off any cost that falls upon them in respect of these vehicles as a charge, though I have put down an Amendment which perhaps we may come to next week to try and remedy that position. Consequently, the whole of this £5 falls upon them.
Since last year the principle was recognised that this charge, however the pros and cons may be argued for the main body of motor users, was not one we wished to fall upon these men. There are 1,500 of these men who have small motor vehicles, and perhaps another 1,500 who have motor tricycles. I hope the Chancellor of the Exchequer will see whether he can insert an Amendment to the Bill similar to the one I had down on the Order Paper. If he cannot do that, I hope he will authorise the Ministry of Pensions to make an allowance proportionate to that which his predecessor allowed last year.

Mr. Wood: I hope I may be forgiven if, like my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) I confine myself to a narrower issue than that which has been occupying the minds of most of my hon. Friends this afternoon. I do not know what has been occupying the minds of hon. Members opposite as we have not heard from them. Perhaps we shall hear from them later.
Last year I was lucky enough to move an Amendment which sought to relieve from the increases of duty on petrol a number of people who had been unfortunate and who are compelled to use invalid chairs. It was a different Amendment from that moved by my hon. Friend the Member for Morecambe and Lonsdale and I am bound to admit I am disappointed—though certainly I would not presume to complain of the decision—that my Amendment was not allowed to be moved this afternoon. That Amendment was to the effect that duty on hydrocarbon oils used for the propulsion of invalid chairs driven by disabled persons should remain at 1s. 6d. a gallon. I am disappointed because I feel that the grounds on which. I moved that Amend-

ment last year have been strengthened since by a number of factors.
The first of the aggravating circumstances is that now, instead of there having been one increase in the duty, there have been two and, therefore, the sum involved for these people is larger than it was last year. Much greater than the actual increase in the duty is the enormous increase in the difficulty for these people in almost every field as a result of the cost of living. The Financial Secretary to the Treasury will know very well that although this is a very important problem it is not a very large one.
Sir Stafford Cripps gave figures last year to show there were roughly 2,500 users of petrol-driven invalid chairs covered by the Ministry of Pensions and the Ministry of Health, and for those people the two Ministries gave help, not covering the cost of petrol but the cost of providing and repairing their vehicles. There were 3,000 other cases some of whom were helped by the National Assistance Board while the remainder bore the whole cost of providing and maintaining their chairs as well as the cost of petrol. To all these people the rise in running costs over the last 12 months, taking into consideration the cost of repairs and the added cost of the new duty on petrol, is something in the nature of 40 to 50 per cent.
Perhaps I might develop a point touched upon by my hon. Friend the Member for Morecambe and Lonsdale in this way. I should like the Committee to consider what an outcry there would be not only in the House of Commons but also throughout the country if this or any other Government came to the House and announced that they had decided to put a tax on walking. The tax might possibly be that rich and poor alike would have to pay a penny to the Exchequer for every five miles they walked. One could imagine that there would be a number of long faces and that a number of hon. Members here would be a little disappointed, particularly with the prospect of having to go through the Division Lobby several times in the next few weeks.
This is not as fanciful as it seems because this method of moving round in an invalid carriage or chair is, for some people, the only means of locomotion. I cannot see that there is any essential


difference between, on the one hand, what would obviously be an iniquitous tax if we were to pay a penny for walking five miles and, on the other hand, the taxation of these people who have been a little more unfortunate—in making them pay the Exchequer a penny for every five miles they travel.
5.0 p.m.
The Ministry of Pensions, which perhaps more than any other Ministry have the job of dealing with a number of unfortunate cases, have for some time recognised the principle that they should give help where it is most needed, and although many of us think the extra sum allotted to the Minister of Pensions by the Chancellor—£600,000—is far too small, none of us quarrels with the use which the Minister of Pensions has made of it. He has used it to give most help to the most needy.
If the Government are in earnest in their desire to give to the most unfortunate the greatest help, as I believe they are, then I ask them to consider, between now and the Report stage, whether they can accept something of the spirit of this proposal to allow to these most unfortunate people, the users of these invalid carriages, a little relief in the very difficult time which is coming upon us.

Sir Peter Bennett: I am sure that we all listened with sympathy to the speech of the hon. Member for Bridlington (Mr. Wood) and to the special case which he put forward. I and my hon. Friends, and, I am certain, many hon. Members opposite, would very much like to know whether anything can be done in that special case. I shall mention a special case myself a little later in my speech, although I am sure it will not receive the sympathy from all quarters which was given to that outlined by the hon. Member for Bridlington.
Before I turn to that case may I remind the Committee that when the Chancellor introduced this tax he said—I do not know whether it was in an attempt to keep up his spirits—that it was only 2 per cent. and that he did not see why it should cause any increase in prices or any inconvenience. I ventured to prophesy that he had made a mistake and that the tax would make a difference; and the results of the tax are now being seen. On Second Reading I gave some figures

of the cost involved and how it was bound to react. I shall not go into them again, because they have been given in still more detail by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) in his opening speech.
The Chancellor's comment reminded me very much of what Sir Stafford Cripps said when he introduced devaluation. He met us privately and told us to do all we could to keep prices down, and then he made a speech in the House telling us that there was no need for costs to go up. "A little bit of ingenuity on your part," he said, "and a little bit of extra effort on your part, and you can hold costs." Now look what is happening. We cannot look at any of these extra taxes in isolation. It is the cumulative effect which is being felt.
The Government say that we ought to "absorb" these items. In industry we have tried to do that, as I can assure hon. Members opposite. We have tried to hold down our costs because we want to fight in the world markets and to obtain the maximum possible amount of business. But with the best will in the world we cannot absorb all these extra charges. I said to my own people, "Can we absorb this?" They replied, "Look what is happening. We could absorb this if this were the only one, but with everything going up we simply cannot absorb them." They add up the sum and every so often they say, "We cannot go on any longer prices have to go up."
If hon. Members talk to their womenfolk they will be told that every time they open the paper they see that the price of some article has gone up. We are worrying about petrol; they are worrying more at home about milk. But everything is rising in price and the Chancellor is deceiving himself if he thinks that he can introduce an extra tax of this kind and not have it passed on to the public.
My right hon. and gallant Friend the Member for Gainsborough reminded us that in the days when the right hon. Gentleman the Minister for Local Government and Planning was Chancellor of the Exchequer he introduced the flat rate tax on motor cars. That has been very much appreciated; we hoped that it would mean an era of bigger cars in this country. But in increasing the tax on petrol last year and again this year the


Chancellor is nullifying to a large extent the gesture made by the present Minister of Local Government and Planning—a gesture which was much appreciated. We were making headway.
I was discussing this question last Friday with my own people in connection with a new car and I said, "Are the makers going to put in a bigger engine?" They shook their heads and replied, "No." They intend to keep the same, smaller engine because they say people are once more talking about petrol consumption. I agree that the majority of British cars go abroad, but the British manufacturer has to have his eye on the day when we shall not be able to send all these cars abroad. He is looking to the day when he must have a home market, and he is keeping his eye on it. He would be very unwise not to do so. Petrol consumption will be a very important matter. Petrol costs are increasing and people will look for smaller cars.
I particularly want to call attention to a point which I mentioned during the Second Reading debate. This tax is very hard on those who use petrol and white spirit as an ordinary manufacturing agent. As a sheer matter of accident they have to use for their raw material what has become the popular fuel for transport. It is hard luck that this burden should fall on them. If they had used turpentine they would not have had to pay, but because they used hydrocarbon oil, which is the fuel for motor use, they have to pay the same tax as is placed upon that fuel when it is used for transport. The cost goes up and up.
The industries to which I refer, such as paint, plastics, the rubber industry, the linoleum industry, the very new, growing industry of chemicals from petrol, old fashioned dyeing and cleaning and boot and shoe polishes, all use petrol or white spirit as a raw material. On a previous occasion the Chancellor said he could not make this exception because it would create administrative difficulties. I asked an old civil servant friend of mine—he has left the service now, he cannot be "got at"—why we have this answer, and he smiled sweetly and said, "The advisers to the Chancellor know very well what he wants them to say. If he comes to them and says, 'You cannot do this, can

you?' they say 'No'." But if the Chancellor made it clear that he wanted and intended to have it, they would find a way. We know that that is so.
I have the greatest respect for the gentlemen who advise the Chancellor of the Exchequer and I am quite certain that this exception could be made administratively possible if the Chancellor would only consider the matter. This is a very hard case. Let us remember that one-third of the paint goes overseas on vehicles and other goods. If it is exported direct there is, of course, a rebate. But it goes on the article itself and so it is putting up the cost.
What happens overseas? They do not say it is administratively impossible, because Americans are far too alive to allow their petrol industry to be a bogey to their smaller industries. They make certain that they have a concession. We are competing with people overseas who have these special arrangements, whereas we do not. I think that this is a case in which the Chancellor ought to put right what has been a wrong, and, if it is the only way we have of making a protest, as we cannot move the Amendment we should have liked to have moved we shall vote against the Clause.

Mr. Macdonald: I have very great sympathy for the Chancellor in the difficult Budget he has had to put before us due to the rearmament programme. I listened very carefully to the Budget debate, and I shall listen very carefully to the debates on this Bill; but I have not yet heard an alternative to how the Chancellor could secure the £35 million which is represented by this petrol tax. It is vital that this sum should be realised for the re-armament programme. I only wish it were possible to realise it without putting a tax on petrol, but, as I say, I have not yet seen or heard any suggestion put forward for how this £35 million could be secured without in some way increasing the cost of living.
I realise that the tax as at present framed will seriously affect the cost of living, and that is why I ask the Chancellor whether he has considered the possibility of differentiating, on the one side, between petrol used for commercial purposes, in commercial vehicles for goods and passengers, and white spirit used in


manufacturing processes—an increase in the cost of which raises the cost of living—and, on the other side, increasing, perhaps unfortunately, the price of petrol for private motoring, so as to offset to some extent the loss of revenue by allowing commercial petrol to be at the pre-Budget price, or at only slightly above the pre-Budget price.
Our petrol costs for private motoring are still lower in this country than in any other country of Europe and I am very glad that it is the case. I am sorry to see it being increased, but I feel that an increase in those costs would be felt less by the community as a whole in the cost of living than would be the effects of adding to the petrol tax generally on commercial and industrial petrol and the by-products.
I want to make a suggestion to the Chancellor which, at first, may sound a very horrible one, and that is that we should re-introduce red petrol. [HON. MEMBERS: "No."] I do not wish to see petrol rationing brought back again; but red petrol at a pre-Budget price, to be used for commercial motoring—commercial vehicles—only would make a very big contribution towards keeping down costs. A very heavy penalty would be applied to people who misused it for private motoring. I feel that unless we make some stand now to differentiate between petrol for commercial use and petrol for private motoring there will be an ever increasing spiral of cost arising out of the general petrol tax.
I shall support the Government in a Division on this matter, not because I welcome the petrol tax—[HON. MEMBERS: "Oh, no."]—but because I believe that that £35 million has to be found for rearmament and I have not heard from these benches or from those benches any other suggestion as to where that £35 million can be secured without an increase in the cost of living.

5.15 p.m.

Mr. Jenkins: Mr. Jenkins (Birmingham, Stechford) rose—

Hon. Members: Hear, hear.

Mr. Jenkins: I apologise to the Committee for committing the sin of-rising from this side of the Committee to intervene in the debate for a short time. We have had a very interesting stream of

speeches from the other side, and I listened with particular interest to the hon. Member for Chippenham (Mr. Eccles) who, in what was not otherwise an untypical speech from him, greatly surprised me by accusing the Government of following in the path of Belgium and Luxembourg on this point. My recollection of our debates on finance and economics over a number of years past now is that the hon. Member for Chippenham has always devoted most of his time to blaming us for not following the path of Belgium. That has been the continual theme of a very great number of his interventions.
We had a very similar debate on this same point in the Committee last year, and then the Opposition took up a rather different point of view from that which they are taking up today. A great number of hon. Members opposite then devoted their speeches to what I thought was the rather narrow point of trying to show that there was inconsistency in Sir Stafford Cripps's approach to this problem. They seemed to have discovered that he had two reasons for putting forward an increased petrol tax last year, and they thought that was a dreadful thing—to have more than one reason for putting forward any proposal in the Budget; and that, necessarily, if there were two reasons they must both be unsound. This year they have moved on to rather wider ground and attacked the tax rather strongly on its own merits.
I must say that I thought that the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) went rather far in the direction of hamstringing a future Conservative Chancellor of the Exchequer—if we are ever to see a future Conservative Chancellor of the Exchequer, which is, of course, a very remote contingency. But he went rather far in hamstringing a right hon. Friend of his in the future because he categorically dismissed the whole defence programme as being any possible excuse at all for bringing forward a tax on petrol at the present time. I take it that that was an absolutely clear and categorical statement—that a Conservative Chancellor of the Exchequer would never look to the petrol tax at all to finance the defence programme or any development of the defence programme.
The right hon. and gallant Gentleman also talked a good deal about the damage to industry—and I think, perhaps, that he was thinking particularly of the motor industry, but also of industry generally—which the operation of this tax in the last year had already caused. I thought he was rather confused on that point. I do not think he was distinguishing at all clearly—as, I think, we must do, in considering the effects of the tax—between two situations. The first is that in which a tax imposes burdens on certain people—in which certain people have to make a contribution to the Exchequer which they would not have to make if the tax did not exist.
That, of course, has been the case as the result of the petrol tax which we have had for the past year, and will be the case as a result of the increased petrol tax. Certain people will have to bear certain burdens—new burdens—and nobody disputes that for a moment, but—

Mr. Reader Harris: Everybody will.

Mr. Jenkins: Some people will bear a larger part of the burden than other people.

Mr. Harris: Everybody.

Mr. Jenkins: Not everybody, necessarily, at all. But there is a difference between putting forward the point of view that every tax involves a burden—that is obviously true—and saying that a tax does damage to industry, which I would take to mean that it harms productive industry and prevents it from reaching that degree of efficient production which we should otherwise have obtained.

Mr. Nabarro: Has the hon. Member forgotten that we are discussing also increased duty on oils—industrial oils—which, assuredly, must affect every industrial undertaking in the country and the cost of production of every article produced by British industry?

Mr. Jenkins: Certainly we are discussing that as well, and certainly the people in the industries to which the hon. Gentleman refers are some of the people who will have to bear this additional burden, but the point that I am trying to make—and I think that if the hon. Member and his hon. Friends in front of him kept

quiet for a moment they might be able to appreciate it a little better—is that there is a difference between imposing a purely financial burden on the whole community, or on a particular section of the community, and imposing a tax which harms our productive capacity in the sense that it makes our total wealth as a nation less than it otherwise would have been.
I see no evidence at all that the increase in Petrol Duty last year or the greater Petrol Duty which we are now imposing will have that effect. I should not have thought that even the hon. Member for Edgbaston (Sir P. Bennett) would have argued that it was having that effect on the motor industry today. The motor industry certainly has its problems at the present time, but they are almost all problems which arise on the supply side, through the difficulties of getting sheet steel and the like, and not problems which arise from the demand side, because on that side it is difficult to imagine a more prosperous prospect than that which now faces the motor industry.
We were also reminded by the right hon. and gallant Member for Gainsborough (Captain Crookshank), and by other hon. Members opposite, of the old argument that this duty would do great harm because it would make it impossible for our manufacturers to compete in export markets without sending up their prices. I should not have thought from what one has seen happening to British exports over the last year that there was much substance in that argument. While I agree that increases in costs are gravely disadvantageous to the position at home at present, I should have thought that the fear that a small increase in the Petrol Duty, leading to a small increase in transport costs, would gravely harm our position in the export markets was entirely fictitious.

Mr. Nigel Davies: Cannot the hon. Gentleman envisage what the future position will be in regard to selling cars overseas?

Mr. Jenkins: In a position where the major and immediate problem is one of a high re-armament burden, I think that has to be given greater consideration than the problem of future selling difficulties. Our problem at present is much more that of selling our exports too cheaply.


I remember putting forward this argument some six months ago and some hon. Members opposite objecting to it. Now we have the testimony of the "Economist" and the "Financial Times" and other papers well-informed on the subject, that our difficulty now is much more that of selling our exports too cheaply than of pricing ourselves out of world markets.

Mr. Osborne: Is the hon. Member not aware that when the pound was devalued from four to 2.80 dollars British industry was compelled to sell three articles to produce the same amount of dollars as formerly came from the sale of two articles? The policy which hon. Members opposite applauded only two years ago has produced the very difficulties about which the hon. Member is now complaining.

Mr. Jenkins: I do not want to go too far on this path, but I would be extremely happy to answer the hon. Member on that point. I think that the reduction of dollars to 2.80 was the right rate to go down to in the circumstances of the autumn of 1949. No one could then predict that we were to have a Korean war and the consequences which would follow from that war. We are now in the position, vis-á-vis the rest of the world and because of the development of the Korean war and the things which have come in its train, that we might have been in the autumn of 1949 if we have not devalued not to 2.80 dollars but to something well below that. The rate of 2.80, which was probably right at the time and would have been right if the Korean war had not broken out, is probably now too low a rate, and we are in danger not of pricing ourselves out of the world market but of selling out exports rather too cheaply.
We had the argument from the right hon. and gallant Member for Gainsborough about whether or not our petrol, even after this increase, will still be a good deal cheaper than that of most other countries in Europe. He pointed out that the price of petrol was not the only factor which we had to take into account. We cannot, he said, just talk about the price of petrol and leave the matter there. We have also to talk about other forms of taxation which fall on road transport and private motoring in other countries. I think that there is a certain amount in what he said. He only managed to present a case even on that score by taking

a very untypical example of the vehicle which did only 5,000 miles a year. I should have thought that was an un-typically low number of miles for a commercial or private vehicle to do, for if we accept that low number of miles per year, then other forms of taxation become relatively important and petrol costs become relatively unimportant.
If we take a more typical and higher rate of mileage per year, we get a very different answer. If the right hon. and gallant Gentleman had taken a figure nearer the average, I think that it would still have been the case that, even on his own showing, the position is that motoring and road transport costs are a good deal cheaper and will be a good deal cheaper in this country than in most other countries.

Mr. Walker Fletcher: Will the hon. Member deal with the point that the original cost of nearly every Continental car is hundreds of pounds below that of a parallel vehicle here even without Purchase Tax, and that that cannot be wiped out in a year's motoring even if he takes 10,000 miles per year instead of 5,000?

Mr. Jenkins: That would be only one of the factors which, I suggest, would be put on the other side. The prices which many people pay for cars on the Continent—Purchase Tax or no Purchase Tax—is not much less than that paid for cars in this country at present.
I have some dislike of all indirect taxes. I am essentially in theory a direct tax man. I think that direct taxes are better than indirect taxes, but I do not think that the Opposition would wish to put forward this point of view too strongly. I do not think that they take that view nearly so much as hon. Members on this side. I remember that the hon. Member for Chippenham moved an Amendment to the Finance Bill last year or the year before to reduce the standard rate of Income Tax, and he said that this was their main attack on Socialist financial policy. I think that is the point of view of the Opposition. It is direct taxation and Income Tax to which they object most strongly. Therefore, I do not think that they are in a position to say, "We are against indirect taxation like this one because it puts up the cost of living on this and that."
The only way in which one can consistently take that view is if one prefers higher direct taxation, and that is just what the Opposition do not like. I think that this tax—and, as I say, I have always had some hostility to indirect taxation—is, as indirect taxation goes, not a bad tax. We had a more substantial increase last year, and I do not believe that any evidence has been brought forward to show the disastrous result which it was said it would have. I agree that it imposes a hardship on certain special categories.
I was glad that the hon. Member for Bridlington (Mr. Wood) brought forward his point of view on that matter, and I think that it would give pleasure to hon. Members on both sides of the Committee if my right hon. Friend the Chancellor of the Exchequer could do something about the special category of disabled pensioners. Broadly speaking, however, over the whole field no evidence has been brought forward to show that this tax made anything like the changes prophesied by it by hon. Members a year ago. I do not believe that this other increase will either, and in the circumstances of time, and in view of our heavy re-armament burden, for which we have to pay, it is a thoroughly justified increase.

5.30 p.m.

Air Commodore Harvey: I was shocked by the speech of the hon. Member for Roxborough and Selkirk (Mr. Macdonald), who was speaking for the Liberal Party. I felt he had more justification for sitting on the other side of the Committee than many hon. Members already there. It is quite clear what are the intentions of the Liberal Party tonight. The hon. Gentleman asked where the money was coming from in place of this tax, but did he ever hear of economies in Government Departments?

Mr. Macdonald: Will the hon. and gallant Gentleman tell the Committee where these economies are to come from?

Air Commodore Harvey: There are many directions from which economies can be made, but perhaps I may be allowed to make just one. I suggest that the Ministry of Civil Aviation should be abolished. That is one; there are numerous others that have been outlined in

the House time and time again. This £35 million is wanted, as my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) said, for it coincides with the sum lost on the ground nuts scheme. [HON. MEMBERS: "No."] I know that hon. Members do not like to hear these things, but if they do not like them they can leave the Chamber. It is all very well for the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) to mumble away, but I shall make my speech in my own way.
The Government bought a very large trawler some time ago, and it is operating overseas under the Colonial Development Corporation, losing a packet of money. There are other schemes operating in other parts of the world, which today are losing money and could well produce economies if the Government were prepared to look into them, and to effect economies within their own organisation. The eventual result of all this is that the workers have to pay in the long run. Hon. Members opposite cry about soaking the rich.
The hon. Member for Stechford (Mr. Jenkins) talked about direct taxation. Does he think that if direct taxation is increased more money will be obtained? Of course not, for we get to such a point that returns diminish if we go on increasing taxation. My purpose in rising is to refer to my Amendment, which was not called. For that I think hon. Members opposite were considerably relieved, when they heard that the matter is to be taken on the Motion "That the Clause stand part of the Bill," so that they will not be compelled to go into the Lobby and vote against the Government. That probably lets the Liberal Party out as well.
I want to refer to the question of taxation on aviation spirit. This is a commodity which is bearing the full tax of 1s. 10½d. per gallon. It is a well known anomaly. If an aircraft refuels at Heathrow and proceeds abroad it does not pay any taxation except for internal flying or to the Channel Islands or to the Isle of Man. The jet and the gas turbo-powered aircraft, which use heavy hydrocarbon oils like kerosene, are exempt from taxation, and it seems wrong that an aircraft, which uses aviation fuel, has to pay a tax, while ones like the Vickers Viscount, which will be coming into operation soon in the Airways Corporations, will be


exempt because they use kerosene. That does not make sense at all.
Why have taxes on aviation fuel at all? This tax is primarily a road tax. It was first brought in as such, but aircraft get very little benefit from what is in the Road Fund. In 1950 the aviation industry consumed approximately 52,000 tons of aviation spirit, which is 15½ million gallons. Of this total amount of 52,000 tons 60 to 65 per cent. was used in bench testing of aircraft engines and test flying. In the aircraft industry manufacturers carry out thousands of hours of endurance tests to ensure that we have the right and best quality engine for our defence, for commercial use and for export. The duty paid in 1950 was twice as much as was paid in 1949.
This industry is not really a large industry and it uses a relatively small amount of raw material. It exported in 1950 £34¼ million worth of equipment, much of which went to hard currency countries in spite of re-armament. That is a little more than in the previous year of 1949. Furthermore, as a result of the work carried on in the industry licences were granted to foreign countries like Switzerland, Sweden and the United States, and this led to invisible means of earning dollars and other hard currencies.
Most of the flying of B.O.A.C, which is a Government Corporation, is exempt from paying Petrol Duty, but when they fly their aircraft from Heathrow to Filton for servicing they have to pay a duty. British European Airways have to pay duty on all internal services. Therefore, a loss of £1 million or so by the Corporation goes out of one pocket and is brought into the other. It does not make sense at all. The charter companies, in which I have a very small interest, have no State on which to fall back for subsidies and cheques to pay the deficit at the end of the year. They have been struggling against every handicap that could be imposed.
At a time when this country needs an air merchant fleet a good many of them have gone out of business. We have a small Transport Command, because orders were cancelled exactly a year ago. It is unbelievable that 12 months ago the Government cancelled orders for R.A.F. Transport Command aircraft. The orders were renewed in the autumn, but after the Berlin air lift experience it was suicidal

to cancel such orders. Nevertheless, it was done and yet the private operations, who are prepared to operate heavy transport aircraft commercially, are given no assistance whatsoever in the form of relief of tax on petrol. If there had been, there would today have been a ready made Transport Command to help us.
Then there is the question of private owners. Unfortunately, there are very few private owners who have their own aircraft but some have. Some firms have their own aircraft to move executives and to carry raw materials quickly from different parts of the country. They have to pay the full tax on the use of aviation spirit, but if they go to a flying club and hire an aeroplane it is exempt from taxation. There, again, it seems quite wrong that if a person flies his own aeroplane he has to pay tax, but if he goes to a club and hires an aircraft for 50s. or £3 an hour he gets away with the tax.
I want to refer quite briefly to the safeguards against evasion. I believe that a scheme could be brought into being whereby there would be no "fiddling" at all. There is a workable scheme in the fishing industry. For aeroplanes and engine works that are situated on an airfield and are closely centralised, I suggest that the onus should be on each company to seek the refund. Aviation spirit differs from motor spirit in that it has high octane value. It is usually differently coloured, so that it is readily identifiable. When hon. Members talk about aviation users in the United States, Canada and New Zealand they should remember that they do not pay the same rate of taxation as is levied on motor cars.
Our aviation industry is not a big one but it is vital to this country and should be given every encouragement. I ask the Government to meet the industry, which will be prepared to discuss ways and means, because by so doing they will be rendering a great service to this important industry.

Viscount Hinchingbrooke: Like my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey), I was disappointed in the attitude which the representative of the Liberal Party took this afternoon. How the late Mr. Gladstone would turn in his grave to hear what was said today. Mr. Gladstone suggested that


money should be left to fructify in the pockets of the people, but the hon. Gentleman to whom I have referred says: "Take it out and give it to the Executive to spend as they like best." It is inevitable that this debate has become like a concertina. We open out particular subjects and then have to close them down in order to give special consideration to important points. Perhaps I may be forgiven if I do not follow the line taken by my hon. and gallant Friend the Member for Macclesfield, but attempt to deal with some of the wider issues.
I have tried to face this duty by reference to three or four criteria. Is it required for defence? Is it required in order to put the railways on their feet, or as a device for removing excessive purchasing power from the people? Or do we fall back on the old idea of the present Chancellor of the Exchequer that somehow he must have more money to balance his enormously inflated Budget? On the first point, I cannot find any evidence that the increase in the Petrol Duty is for purposes of defence. If it had been put upon that basis it would have secured overwhelming support from my hon. Friends on this side of the Committee.
We place defence in priority number one today. If the Chancellor would say that, by putting up the tax another shilling or whatever it might be, enormous quantities of petrol would be saved and left in the Middle East in petrol dumps, would be refined and stored in this country, put underground in disused mines or something of that kind, I dare say this proposal would go through without opposition. There has been no suggestion of that kind whatever. No evidence has been brought forward that the sales of petrol have been lower since the tax was announced or that there will be any saving or forestalling for military purposes of the use of petrol. In the face of all that, I cannot see how this tax will react upon the re-armament programme.
We are sometimes told that taxes are imposed upon commodities in order to make them only partly saleable or unsaleable altogether, and that those who work in those industries transfer their labour to other and more vital industries. This time it is re-armament, but it has been housing. We have heard the same excuse for four or five years. So far as I know,

not one dealer has left his petrol pump, not one lorry owner has given up business, because of the increased Petrol Duty and transferred to making ammunition or tanks. That has not been suggested, and so I must conclude that the imposition of this duty for the purposes of defence is null and void and was never contemplated.
What about helping the railways? Last year we were in the same difficulty. Some of my hon. Friends thought that this duty was specially imposed in order to put traffic back on to the railways and to keep up the railway productivity and employment, as an aid to the syndicalist theories of the representatives in this House of the National Union of Railwaymen. We thought there was something in that, but it never came off. If it was intended, we never saw the results. Instead, the railways got into a state of increased chaos and there was no evidence at all that the Government were going to be able to help the railways by penalising the roads, or by any other method. The railways seem to be getting into a greater mess every day. Only this morning—or perhaps it was yesterday—we read that coal is now to be distributed by road and is to be taken off the railways altogether. If the Petrol Duty is put up in order to aid the railways, I do not see how help can be given in that way.
5.45 p.m.
There is the question of removing excessive purchasing power. That is a favourite theme of the Chancellor. It seems to be a new Socialist theory that by raising prices artificially by taxation we can make life much harder and more difficult for people, and so force them to work overtime to earn the means to meet the rising cost of living. It that is the Government's policy, let us have it stated out straight. If the Chancellor's idea is to raise prices by taxation all round, why should he choose so limited a weapon as taxation?
If the theory now is that the cost of living has to be such that people are to be forced against their will to work much harder in order to produce more, there is a much better weapon than taxation, which is limited to certain fields only. There is the weapon of removing price control altogether. That would result in much higher prices and would be far more effective in achieving what appears


to be the desire of the Government. I recommend it to the Chancellor of the Exchequer, who seems to be keen on applying this more drastic theory of life to Socialist society. There is nothing in this business of imposing petrol taxation in order to remove purchasing power, because it is far too limited in its effects.
Finally, there is the question of finding revenue for balancing the Budget and to close the inflationary gap. That is the only excuse that the Government can possibly offer for the Petrol Duty increase. The Budget now stands at such an enormous figure that it is quite meaningless to talk in terms of closing a gap of £20 million, £30 million or £40 million, when we are getting in something like £3,500 million by taxation. It has not the slightest effect. The very size of the Budget makes it inflationary in character. Why? Because it takes money away from savings and gives it to the Government. The Government spend it, and their spending is added to the enormous aggregate of private spending. It is the aggregate of private spending plus Government spending which produces inflation. By taxing petrol, the Government put more money into the hands of the Exchequer. The process of spending it at those levels is inflation. The Government have, therefore, no logical defence for this extra Petrol Duty.

Mr. Nabarro: Many arguments have been advanced by hon. Members on this side of the Committee today, but there has been only one solitary voice from the other side, although I am glad to see that another hon. Member is preparing to take up the cudgels shortly. As to the economic review given by the hon. Member for Stechford (Mr. Jenkins), perhaps there is a little sanity in his comment that British exports today, in certain categories, are selling at too low a price overseas; but that is no excuse at all for adding to the costs of production of British industry, for at every stage of every manufacturing process by every industry in Britain costs are to be inflated by the effect of the increase in the duty on light hydrocarbon oils and the majority of the light oils used for direct industrial purposes as distinct from petrol for distributive purposes.
I wish to direct a few comments, initially, to the effect of the increase in

duty in so far as it bears on the costs of distribution. It is not practicable or sensible to view this increase out of relation to other imposts which have been made in the course of the last 12 months in other directions, in so far as they affect the motor transport system and its use for distributing goods. Last year, for the first time, the Chancellor of the Exchequer decided as a matter of fiscal principle—I imagine that it was a matter of principle, because it departed completely from anything which had formerly been done—to place a purchase tax on capital equipment in the shape of motor trucks and vehicles used for commercial purposes. That, in itself, added to the cost of distribution.
Secondly, last year the duty on petrol was raised by the equivalent of 9d. a gallon, and this year by a further 4½d. a gallon, which is accumulatively yielding a total of 1s. 1½d. a gallon, a further heavy impost on the cost of distribution by road. No one has yet mentioned in the debate that the third leg of this trinity of additional distributive cost in the case of motor vehicles is the withdrawal of the initial allowances which were lauded for several years after 1945 as being a great incentive to industrial development and re-equipment. The combination of these three factors—and it is the combination with which we ought to be concerned—must have a direct and onerous bearing on the cost of distribution of everything that is essential in our daily lives. Hon. Members have mentioned bread, coal and clothing. The hon. Lady the Member for Coventry, South (Miss Burton), tends to specialise in the subject of vegetables and fruit sold in greengrocers' shops. [HON. MEMBERS: "A proper racket!"] Yes, a proper Socialist racket, derived primarily from excessive costs of distribution.
I speak with some authority in this matter, because a very important fruit and vegetable producing area is to be found in Worcestershire and Herefordshire. [Interruption.] The hon. Member for Spark brook (Mr. Shurmer) seems to want to blow off a lot of steam. Most of his constituents buy their vegetables and fruit from this area, and the cost of those commodities is largely determined by the cost of the motor transport from the Vale of Evesham, Worcestershire and


Herefordshire to Birmingham. The profits here are made by the Chancellor of the Exchequer as the result of his excessive imposts on the costs of distribution.
These essential items of diet, vegetables and fruit, undoubtedly cost far too much today, and the principal item in their cost in the shops is the cost of getting them to the market and distributing them from the market through the retailers to the general public. That cost is very largely inflated, and has been in the last two or three years, by the constant increase in the cost of distribution by road transport. Because of their highly perishable character, those goods cannot very easily be sent by rail. On that score alone I condemn what has been referred to as "only a tiny increase" in the Petrol Duty; taken in conjunction with many similar imposts, it has had this accumulatively inflationary effect.

Mr. Manuel: Surely the hon. Member is aware that over the last year there has been a tendency for profit margins to increase? [HON. MEMBERS: "No."] He ought to examine the profit margin before talking of increased prices, or are profits sacrosanct and not to be brought into the reckoning in relation to the price of goods?

Mr. Nabarro: The hon. Member knows that there is no direct evidence of any increase in the profits made by retail or wholesale greengrocers.

Mr. Tomney: Have there been any bankruptcies?

Mr. Nabarro: If any increased profits have been made in the last 12 months, the Chancellor is the chief beneficiary, for he takes something like £2 out of every £3 of gross profits made.
To pursue my original argument, every necessity of life is increased in cost by reason of this inflationary duty. The old battle-cry of hon. Members opposite, "Soak the rich," is wearing thin today, and the Socialist policy is now a direct one of "Soak the poor." That is all this Measure represents. [HON. MEMBERS: "Nonsense!"]
One of my hon. Friends made a passing reference to the effect on the fares of taxicabs. Today there is a consumer resistance to using taxicabs at all. I have no doubt that the resistance will greatly

increase in the course of the next few weeks. It is not only the Tory rich or Members of the House of Commons who use taxicabs, but also ordinary members of the travelling public. Many people have to pass through London to get from one part of the country to another. A traveller from Reading to Colchester will arrive at Paddington and have to cross London by taxicab to get to Liverpool Street for his train to Colchester. I ascertained this morning that the cost today of a taxicab carrying three passengers between Paddington and Liverpool Street is 9s. 6d., and only slightly less for one passenger, without a tip—the taxicab drivers will not receive so many tips on the new scale of charges—and that represents something like 35 per cent. of the railway fare between Reading and Colchester. No one can tell us that the reason for the tremendous increase in taxicab fares is anything but a direct result of the accumulatively inflationary effect of many consecutive imposts made by the Chancellor on the motor industry and the travelling public during the last two years.
6.0 p.m.
I shall vote with great joy against these measures tonight. I know that in recording my vote the overwhelming bulk of sensible and informed opinion in this country will be with me. As for what I consider to be the miserable statement made by the hon. Member for Roxburgh and Selkirk (Mr. Macdonald), that no alternative tax has been suggested, I would remind him that we are now on the first Clause of the Finance Bill, that there are another 37 Clauses to follow, and that practically every hon. Member on this side of the House who has spoken in any Budget debate, particularly on the Committee stage of the Finance Bill in the last five years, as practically every hon. Member has done, has made a large number of suggestions to the Government as to where a multiplicity of economies, large, medium and small, could be effected—[HON. MEMBERS: "Tell us."]—out of the £4,300 million which the Chancellor is expropriating this year.
The Chancellor is having a quiet giggle at that statement. Does he really mean to say that he could not find less than 1 per cent.—for that is £35 million in economies out of the total of the national


expenditure in order to avoid having to face this inflationary impost on the whole of the British people, including the poorest sections of the community? For that reason I shall energetically and joyfully vote against this Clause.

Mr. Crosland: I hope it will not be assumed by any hon. Member opposite that the relative lack of speakers from this side is due in any way to our inability to repudiate the arguments which are being put forward. I assure hon. Members opposite that the failure of a great number of hon. Members to rise from this side of the Committee is due merely to our earnest desire to mark and learn and inwardly digest the arguments put forward from the Opposition in order to be better informed as to where to put our vote.
Most of the arguments have been on the subject of how much damage this increase of tax will do to the country. The speech of the right hon. and gallant Member for Gainsborough (Captain Crookshank) was directed mainly to showing that, in the words of the right hon. and gallant Gentleman, a great deal of damage would be done by this tax both to industry and to the standard of life of the country as a whole. Evidently this argument must revolve around what one means by great damage. No one can say that the increase in the Petrol Duty last year did enormous damage to the country in the sense that, for instance, we had mass unemployment or that, as a result, our exports have collapsed and our balance of payments has gone completely to rack and ruin.
But what has legitimately been pointed out is that the increased Petrol Duty is bound to involve some hardship for certain people. It involves an increase of taxi fares, bus fares, furniture removal charges and, as has been made clear by the hon. Member for Kidderminster (Mr. Nabarro), possibly even an increase in the cost of distribution. We have heard also that it means a halfpenny per car mile increase on the average, and the Road Haulage Association estimates that the costs to their members will go up. It would be silly to deny that this increase in charges will affect people. It will affect people adversely, and obviously the entire country would prefer that we should not have this increase in tax. So

there is common agreement there on both sides of the Committee.
The real issue is whether one can seriously maintain that the increase of 4½d. in the Petrol Duty this year, considering the immense burden of rearmament, which both sides have accepted, is an insuperable burden to put on the people of this country. I suggest seriously to hon. Members opposite that they cannot maintain that these increases in taxi fares, in the cost of furniture removal, and the like, are an intolerable sacrifice to ask the people of this country to make, when we have the £4,500 million re-armament programme to pay for. I do not suggest for a moment that it is nothing, but I suggest that it is something which people will accept if it is put to them as we ought to put it to them, as part of the necessary price we have to pay if this country is to be made secure.
Another argument raised by hon. Members opposite was that the increase in the price of petrol would have a serious effect on our exports and on our ability to sell abroad. I find this argument difficult to follow. I wish the hon. Member for Chippenham (Mr. Eccles) was in his place, because a number of people associated in the public mind with the Opposition have recently been talking about the case for revaluing the £. Mr. Harrod, a well-known figure who was trying hard for a time to become a Member of the Opposition—we hope he will eventually succeed—has in the "Financial Times" and elsewhere been putting forward strongly the case for revaluation. It is fair to say that this case has had a great deal of support, which is not party support in the slightest degree. It has certainly had some support in the business world, and I imagine that some hon. Members opposite think that a strong case can be made out.
But if it is true that a strong case can be made for revaluation, it cannot at the same time be maintained that this comparatively small increase in our costs which will follow from this duty will wreck our exports in the markets of the world. Both arguments cannot be true at the same time. As to the point which two or three hon. Members have raised, that any taxation which gives, as the hon. Member for Chippenham said, a twist to the inflationary spiral is harmful,


I understand that what is meant by that is that any tax which increases the price of anything in present circumstances is a harmful tax and ought not to be put on.

Mr. Osborne: Does not the hon. Gentleman agree?

Mr. Crosland: May I complete my point? This is a serious argument. It means, if it is to be taken literally, that no indirect taxation of any kind is to be imposed to pay for re-armament; because, clearly, any indirect taxation of any kind increases the cost of the article on which the tax is imposed. If we are to take this argument seriously, it means that the Opposition are firmly committed to the policy that re-armament is not to be paid for by any increases in indirect taxation, but entirely by increases in direct taxation.

Mr. Osborne: It might be paid for in two ways. In one case by the total increase in productivity of the whole nation, thus increasing the national income, or partly by economies which we are convinced could be effected in Government expenditure.

Hon. Members: Where?

Mr. Crosland: It would be out of order either for the hon. Member or myself to go into the question of economies in Government expenditure, but perhaps I could say that, looking through the debates which have taken place in the last 12 months in the House, and also looking through Questions in the House over the last year or so, it is the case that the Opposition again and again have asked for an increase in Government expenditure and, when cuts have been made by the Front Bench, they have protested vigorously.
My last point is on the reserve of taxable capacity, a favourite point of the hon. Member for Chippenham. He says that we are leaving no reserve of taxable capacity, that every increase is draining away what little reserve there may have been before and, therefore, that we shall be in a disastrous position if a war should come. Yet he must know that no war that this country has had to pay for in the past has been paid for primarily by an increase in taxation imposed when the war broke out. It has not been paid for primarily even by a fall in the standard of life of the people of this country. Every

war, like the last war, has been paid for mainly—and this is unfortunately where the reserve lies—by not building new capital equipment as we do in peacetime, by running down our existing capital equipment, and by foreign aid. This may or may not be a good thing. My point is that it is historically not true to say that past wars have been paid for by increases in tax imposed at the beginning of the war, and the hon. Member is giving a false impression if he puts that forward.
Again and again this afternoon we have had from hon. Members opposite the phrase "the last straw" They have said that this increase in taxation is the last straw which will break the camel's back. We have had the last straw argument now for six years and on this side we are getting sick of the cry of "wolf, wolf." [Laughter.] It is quite true, particularly if one reads many speeches of hon. Members opposite, that in the last six years we have heard time and time again that some increase in taxation is the end, that it will destroy the productive capacity of the country, that it will wreck our exports, that it will wreck full employment, that it will put us in an intolerable position. And in fact it never happens. What we claim on this side of the Committee is not that this tax will be welcomed or that it will not cause hardship, but that compared with other possible methods of obtaining the same amount of revenue, this is a perfectly reasonable tax and a perfectly bearable burden in the present circumstances.

Colonel Gomme-Duncan: I do not propose to keep the Committee very long, and I regret very much that because of other duties I have not been here so far very long. I just want to say a word in connection with those industries which are not concerned with what I might call motive power and the petrol and oils which affect that. I want to put in a word for the Chancellor's consideration for those industries which use some form of spirit, which comes under the Clause, in connection with processes other than that of the internal combustion engine in all its different forms.
I think I am right in saying that this tax originally was put on solely for the purpose of dealing with the internal combustion engine and the various ways in


which it is used, and that quite incidentally it happened that such things as dyeing cleaning, paint and other different types of industry, came under its operation. I do not think it was intended that this tax should affect those particular industries, and I should like to point out very briefly the effect of the tax, as at present proposed under the Clause, in connection with dyeing and cleaning, which is a very important industry and which affects the cost of living of a very large number of people.
Today, what is known as white spirit is the principal material used in dry cleaning. It is at present subject to a tax of 1s. 10½d. per gallon. That is a very heavy tax for an industry's main material for carrying out its job. As I have said, I do not think it was intended that this industry, among several others that are in the same position, should have been taxed to that extent by a tax which in itself was proposed for the purpose of the internal combustion engine.
A number of deputations have waited on the Treasury from time to time in this matter and they have all been told, I am led to believe, that the Treasury could not make an exception for an industry like this because to do so might lead to abuses. There may be something to consider in that, but it has been perfectly possible to exclude certain industries, apparently, without fear of abuse—such as, last year, the farming industry—and I cannot see why one industry should be selected as being respectable enough not to be likely to indulge in abuse in this matter while another equally respectable industry should not be given the same opportunity of proving its probity.
It is a fact that the dry cleaning industry has not raised its prices in any case more than 10 per cent. since before the war, and in the case of main articles, such as men's suits, which are very important in these days when they cost so much to replace, the price is precisely the same as before the war. That is highly creditable, as every member of the Committee will admit, to a great industry of this kind when one thinks of the rises which have taken place in other industries.
I therefore appeal to the Chancellor, when he considers Amendments for the Report stage, to think whether he cannot give favourable consideration to this industry—other hon. Members no doubt

can speak with authority on other trades similarly placed—which has done so much and over such a wide field of activity to prevent the cost of living from going up when everywhere else it seems to be rising rapidly.

6.15 p.m.

Colonel J. R. H. Hutchison: The method of handling the Clause makes it incumbent upon us to make a series of pictures upon one canvas, which leads, perhaps, to a rather jumbled and confused result. I want, therefore, not to follow what has been said from the benches opposite on the deeper theme of the effect that this tax will have, but to narrow down my speech to the very serious effect that the increase in the cost of petrol will have on the Scottish tourist industry.
The Scottish tourist industry is of great importance to Scotland. It enters very largely into her economy, and upon it she very greatly relies in order to make national ends meet. The industry has been hit recently by two cyclones. The first is the ridiculous Catering and Wages Act, which was framed in a mould for the Ritz and is applied to little country hotels in Scotland, and about which the country has been protesting continuously. The second cyclone is the constantly increasing cost of travel where distances are relatively greater than in England and where the people and visitors are, perhaps, sparser.
Therefore, the situation has now come about that it is quite impossible in Scotland to face the cost of building a new hotel because of the incidence of the Catering Wages Act and the rise in the cost of materials and so on, and the situation will be aggravated by the increased cost of travel which the petrol increase must inevitably bring about. I can only feel that the Scottish, and particularly the Highland, districts, which are, of course, remote, are very remote from the Chancellor's thoughts and sympathy. I beg him to realise that whatever damage has been done elsewhere in industry, as my hon. Friends have said already, in this country, and in travel in other parts of the United Kingdom, the effects of the increased tax on petrol will be even more serious in Scotland.
I also add a word of support to what my hon. and gallant Friend the Member


for Perth and East Perthshire (Colonel Gomme-Duncan) has said about the use of white spirit for industrial purposes. Heavy oils, when used for industrial purposes, are exempt from tax, but white spirit, which ranks somewhere between kerosene and petrol, is suffering this increase of tax, which has gone up from 9d. to 1s. 6d., and now to 1s. 10½d. My hon. and gallant Friend instanced the cleaning industry, but there are many others in which white spirit is used.
Exhortations are always being made to us, and the late President of the Board of Trade, shortly before he demitted his office, was talking about fresh export target figures. We simply cannot go on raising the cost of producing goods and at the same time expect those target figures to be increased. The latest figures which have been published are, in fact, alarming. I think that for the last published quarter the visible trade gap was £235 million, which compares with £71 million, £63 million, £119 million and £96 million in comparable quarters in the four preceding years.
In linoleum, in paint and in a good many other industries this small ingredient—at any rate, a not all-important ingredient—plays its part, and costs continue to go up. Taxes are raised, costs go up, and prices rise. It is a classic example of the Rake's Progress and is, perhaps, the best example of progress which the Government have shown so far.

Mr. Robert Carr: While I am wholehearted in my support of my hon. Friends in their opposition to this Clause as a whole, I wish to concentrate on one particular aspect of it as this new tax affects the cost of light hydrocarbon oils used as raw materials in certain industries. Last year I had the privilege of speaking on a similar Motion and had the privilege of following the hon. and gallant Member for Hull, Central (Captain Hewitson) who made a very fine speech on the same lines, namely that this tax is a bad tax. Unfortunately, to my disappointment on that occasion he did not follow his views into the Division Lobby. I was hoping that he would be here today so that again I might have the pleasure of his verbal support, if no other, on this matter.
I speak on the matter because I have some special experience of the effect of

the tax. I represent a constituency where one of the main industries is the paint industry. Indeed, Mitcham is one of the homes of the paint industry in this country, and in every gallon of paint or lacquer which is produced there is on the average 35 per cent. of these light hydrocarbon oils which are the subject of the duty we are discussing.
The case I wish to put to the Government is that in industries of this kind—I only quote the paint industry as one example, there are many others—this extra tax is a direct addition to the manufacturing costs of that industry. In the long term, however easy it may seem for that industry to sell its goods under present conditions, it must be a threat to the very prosperity of that industry. Therefore—and this is particularly my concern—it must be a threat to the long-term prosperity of large numbers of my constituents who work in the paint industry.
I must disclose some slight personal interest in another industry which uses these oils, namely the boot and floor polish industry. This tax will mean an increase in cost which will be at least a halfpenny per pound on most of these types of domestic polishes, a halfpenny which inevitably will be passed on to the consumer and will be one more way in which the cost of living of our people will be increased. This special experience and knowledge of these two industries I have mentioned only gives emphasis to the objections to the tax as a matter of principle. I submit that it must be a bad principle to put a direct tax on raw materials of any industry.
In the very limited contributions which we have heard from the other side of the Committee—a silence which we are assured has nothing to do with lack of arguments; perhaps it is more to do with thoughts of sleeplessness or bad conscience, I do not know—the main argument we have heard has been that perhaps we are selling our exports too cheaply and that there is no great worry about our costs of production. That may be, but I fear that if it is so at the moment it will be of short-lived duration, because if we get any easing in the international position—which I know is something for which we all pray on all sides of the Committee—I fear that along with that great advantage will come the quite frightening counter disadvantage that once again we


shall have a dollar gap staring us in the face and once again every penny and every fraction of a penny on our costs of production will be of vital importance.
It may be all very well to say that when the time comes we will take off the tax. These times can come very suddenly, and I am rather cynical about taking off taxes. The only way to stop a bad tax is to strangle it at birth because, once it has been born and is fed and increased, every increase is that much harder to remove. I only want to use my two examples of two industries with which I have particular interest and knowledge to illustrate the bad principle of this tax as a tax.
If the Chancellor agrees that this is a bad tax in principle, why do we have it? Last year the Financial Secretary answered this point. First he said that there was a good precedent for it. It had been introduced in the first place in 1928 by my right hon. Friend the Leader of the Opposition. I do not feel abashed to say that even my right hon. Friend may sometimes not do what is best, but if that stands out as one mistake—and I must say frankly I do think it was a mistake, even in the context of 1928 and even at the small level of tax of 4d. per gallon—it is still more of a mistake at the high level of 1s. 10½d.
My right hon Friend's mistakes are, fortunately for the country, so few and far between that they stand out as glaringly as the few good deeds of hon. and right hon. Gentlemen opposite. Surely we cannot seriously argue that just because there is a precedent for this tax we should continue and increase it. If we were to follow all precedents we should be still where we were in the days of the Norman conquest. This is a matter in which we should not continue to follow that precedent.
The second argument the Financial Secretary brought forward last year was one of administrative impracticability. As I tried to point out in the debate last year, and many other hon. Members have also pointed out, there are many other countries which do give such a rebate on these taxes on materials when they are used for special industrial purposes. If other countries can find ways and means administratively to apply such an industrial rebate, surely it is not beyond our ingenuity to do the same. Indeed, the Financial Secretary partially admitted this

last year, but then went on to say that the cost of the administrative method would be extremely high. That might have been a valid argument when this tax was at the low amount of 4d. per gallon. Perhaps the administrative cost was not justified then, but it is a very different matter when this tax stands at 1s. 10½d., and evidently other countries have found it worth while, countries such as the United States which have the complication of Federal as well as State taxes which make it more difficult than for this country.
There was one other argument the Financial Secretary used. It was that there was a danger of abuse and that if the tax was exempt on these materials when used for manufacturing industries, they might be improperly used for motor cars and in other ways when they ought to be taxed. Again, other countries have not found that too much of a disadvantage, and in any case I think that on an important matter such as an addition to the cost of raw materials we are justified in taking some risk. Personally, I believe that if administration is right the risk would not be all that great.
I shall certainly willingly and gladly vote against the Clause tonight. I hope that I and my hon. Friends will be successful in carrying the day, but, if we are not successful and the Chancellor has his way, I wish to make the plea to him that he will consider carefully this tax as it applies to raw materials of many industries and see his way to omit those raw materials from the tax. Eventually, I hope that the day will come when this tax on raw materials will be removed altogether. That is something for which I do not feel able to ask today, but I hope that at least the Chancellor will very seriously consider whether he cannot give a concession on the extra 4½d.
6.30 p.m.
What would it cost? On paper, I believe that it would cost £4½ million. I suggest to the Chancellor that it may well not cost as much as that, because in so far as the extra cost of this tax is not passed on to the consumer—and I know that is the appeal which the Chancellor will make to industry—then it must increase costs at the expense of profits, and the Chancellor will lose 60 per cent. of that, which is the average tax return that he gets on profits. So I suggest that


he will not lose the whole of that £4½ million. I hope that I may look to the right hon. Gentleman to give that point consideration, because it is a most important matter to British industry, and is one which should be dealt with.

Mr. John McKay: This question is of sufficient importance to merit some contribution from this side of the Committee. I was glad that the hon. Member for Mitcham (Mr. Carr) mentioned profits, because when one considers an increase of 4½d. a gallon on petrol the question arises how it should be met. It has been admitted that in other countries users of petrol are paying more for it than is the case here. That is not an argument in itself, except under exceptional conditions. The conditions under which it could be an argument would be, if the general economic conditions of this country were such, that we were in difficulties as to where we should impose a tax because we required more income; and the question would then arise as to whether there was scope for such a tax while at the same time carrying on industry with a reasonable return.
What will be the general effect upon industry so far as its ability to carry on is concerned? Is the general condition of almost any trade or industry in this country such that this 4½d. per gallon tax increase on petrol, to the extent that it enters into their operations, will affect their ability to produce and sell? The Opposition will have great difficulty in indicating any industry which is in that condition, so in that respect there is no valid argument.
The next argument used is that this tax, small as it is, will be passed on the consumer. Are the profits that are being made in industry generally so small that industry cannot afford to carry on and, by keeping the price of its products as at present, take perhaps just a little less profit than is being taken at the moment? Unless hon. and right hon. Members are prepared to give a definite illustration which shows that by this imposition some industry will not be able to carry on with a reasonable return, the case against this Clause is weak.

Mr. Nigel Davies: Mr. Nigel Davies rose—

Mr. McKay: No, I wish to go on.

Captain Duncan: Captain Duncan (South Angus) rose—

Mr. McKay: I do not feel inclined to give way. Members opposite have had every opportunity of speaking.

The Deputy-Chairman (Colonel Sir Charles MacAndrew): If the hon. Member for Wallsend (Mr. McKay) does not give way the hon. and gallant Member must not stand up.

Mr. McKay: I pass to another point. Is there any sense of responsibility in the attitude now being taken up by the Opposition? If they press the matter home, what they want to do in reality is to take away £35 million from the Exchequer. If they do that there is a bounden duty upon them either to indicate clearly where that £35 million can be saved—[HON. MEMBERS: "Groundnuts."] That has passed away into oblivion. [Laughter.] The groundnuts liability has passed away, it has disappeared, the industry has disappeared. If an industry passes away it ceases to be a liability. So much for groundnuts.
The problem which the Opposition has to meet is where they are to get the £35 million to meet the general policy of the country. They can argue, of course, as has been done on many occasions, that economies could be made, but despite all their arguments they find it difficult to prove that the situation in which that can be done exists. It is quite easy to say in discussions, after seeking to take away income from the Exchequer, "You can effect this and that economy here and there." But what matters is how expenditure is cut and whether the expenditure that is subject to a cut is essential to the well being of the country.
Let me assume that the Opposition are right in wishing to cut taxation. Is this the only vital part of the taxation which the country has to face? Is this the particular kind of tax that should be abolished? Is this a tax that will weigh heavily on the ordinary worker? [HON. MEMBERS: "Yes."] Does it mean that the whole of this 4½d. tax on petrol is to be passed on to the ordinary working man who can pay only a small amount of taxation? Are profits so small that industry cannot afford to carry the increase? Is that the present condition of affairs in the country? There


is a seller's market. Not only is the petrol tax passed on to the consumer, but industry is passing on to the consumer the Income Tax that it is paying. It is admitted, in the Budget which the Chancellor and his colleagues have put forward, that the economic condition of the country is such that at the present time we shall be able to get a sufficient return to pay that increased Profits Tax and still have sufficient profits left. What does that indicate?

Mr. Frederic Harris: Mr. Frederic Harris (Croydon, North) rose—

Mr. McKay: No, I am not giving way. That indicates to any logical mind—[HON. MEMBERS: "Oh!"] Yes, it indicates to any logical mind, to any economist and to any financier, "I have an extra tax to pay in the shape of Profits Tax. I can cover that extra taxation and at the end of the year"—as the Chancellor has said—" I shall have more net profit than I had the year before."
How has he managed that? What is the cry at the present time? It is that the cost of living is going up. But are the profits going down? No, profits are going up too. That indicates that the production industries of the country, while they are having to pay more for their raw materials, are passing it on in price and making the same profit as in other years. The whole thing indicates a selling market. There is no difficulty in selling the commodities despite the increased cost and rising prices. The person suffering most is the man in the street, because profiteers are not prepared to reduce their profits. Despite the agony of the country, they wish to maintain their profits not only as they were, but in a rising category. That is the general position.
There are other taxes which to my mind are weighing heavily on the people, but there is no Amendment in respect of them. For instance, there is no Amendment on the Purchase Tax. [HON. MEMBERS: "Yes, there is."] I have not seen one. [Laughter.] Perhaps I may be mistaken. Anyhow, to my mind the position is such that hon. Members opposite have to indicate either the economies they can make or where they will get the money provided for by this Clause. And from that point of view, having to vote against them in the Lobby, I am speaking against them now.

6.45 p.m.

Mr. Geoffrey Wilson: I do not propose to follow the hon. Member for Wallsend (Mr. McKay) in any detail, because he started by alleging that this is a tax on profits. I wish to speak from the point of view of the transport industry and I have not noticed any excessive profits in the nationalised transport industry of recent date. My right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) pointed out that the Chancellor gave in his Budget speech four reasons in favour of this tax. He said that the increase made last year was overdue; that there was little sign of the damage which it had been alleged would occur as the result of that increase; he then produced the old argument, which has been repeated two or three times this afternoon, that the increase was only a small one and therefore did not matter—which always strikes me as a most extraordinary argument—and, finally, that petrol in some other countries in Europe was, in any case, more expensive than it is here.
It is to the last point to which I wish to pass as the other points have been dealt with at some considerable length and, in passing, I would remind the hon. Member for Wallsend that if he wants to find examples of the cumulative effect of these small increases he had better read the speech of my hon. Friend the Member for Edgbaston (Sir P. Bennett), which perhaps he did not hear, because concrete examples were given in that speech. The last point made by the Chancellor about the cost of petrol in. Europe seems fallacious, because in this country we are in an entirely different position from those countries in Europe where the cost of petrol is higher. In the first place, we are an exporting country with very few raw materials and while some of those countries in Europe with higher petrol costs are also exporting countries-they have a considerable quantity of raw materials in proportion to their size. Our only exportable raw materials are coal and china clay and a few minerals; with the result that, as we have to live by our export of manufactures made from our imports transport is a particularly vital matter to us and any increase in transport charges is liable to affect our exporters three times over.
First, it is liable to increase the cost of obtaining raw material and bringing it


from the port to the factory; second, it will increase the cost of taking the finished product from the factory to the port for re-export; third, our exporter is liable to be faced with an increase in wage cost, because, as has been pointed out already, in many industries in this country the workers do not live near to their factory and are dependent on transport to get to their work and if there is an increase in passenger transport costs a demand for increased wages naturally and reasonably follows. If there is an increase in transport costs and exporters have to pay three times over, and those conditions do not apply in many countries abroad where perhaps the cost of petrol is higher we are, nevertheless, worse off.
Moreover, for better or worse we have in this country a nationalised system of transport which, at least in intention, sets out to be integrated between road and rail. Only last April, before the recent increase of 10 per cent. in the rail charges the railways were losing money at the rate of £460,000 a week. There is a good deal of lee-way to be made up if we are to get the transport system into a reasonably economic position. It certainly will not help to add to the transport costs by increasing the petrol charges because that is bound to have an adverse effect on the amount of travel both by road and rail. It should be remembered that railways themselves are considerable users of petrol in connection with cartage charges and so on, and it will have an effect on the overall charges which both the railways and the nationalised road transport collect.
There is another great difference between this country and other countries. I do not know if it is commonly realised that we have a greater density of traffic on our roads than anywhere else in the world, including the U.S.A. I will give the Committee one or two figures in that connection. Details of the density in traffic per 1,000 miles of road are: Canada, 3,236; New Zealand, 3,649; Australia, 1,753; the United States of America, 12,416; and in this country 14,874. It follows that petrol is a very much more vital matter to us than it is to these other countries. Per mile of road we use more vehicles than other people, surprising as that may seem to those who have travelled in some of these other countries and seen

the intense density of the traffic in certain areas.
For these reasons, it seems to me that not sufficient attention has been paid to this question. I hope that the Chancellor, notwithstanding the few hon. Members behind him who have taken part in this debate, will reconsider the matter and see whether something can be done to ease any increase in charges which will fall so heavily on transport and, therefore, have an adverse effect on our exports.

Mr. Profumo: If I came here today feeling that this was a bad tax, I feel so even more profoundly now after having listened to so many logically argued speeches about the vast ramification of problems covering the whole of our national life which this tax will impose upon our people. I have been watching the Treasury Bench very carefully during these speeches, and it looked to me as if the Treasury representatives have already got a closed mind on this subject. If there is anything worse than the closed shop principle, it is the closed mind principle. I hope that the Chancellor and his hon. Friends are seriously considering what has been said from these benches.
In particular, I desire to reinforce what my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) said about the effect of the tax as applied to aviation spirit. This tax is monstrous, for three reasons. First, it is discriminatory; secondly, it is unfair; and, thirdly, it is a low yielder. It affects B.O.A.C. and especially B.E.A. in an extremely adverse way. Here, may I refer to what was said by the hon. Member for Wallsend (Mr. McKay) in a speech which was far too deeply principled for my perception, or else just charmingly naive. It seemed to me that the burden of his contention was that this was not a bad tax, because it need not be passed on to the consumer, because profits in industry are so big that the great profit-making concerns ought to absorb this increase within their own margins.
That may be all very well until we come to a concern which is not making a profit. When we consider the Government-owned British European Airways Corporation, which although gradually managing to reduce its deficit is still being


buoyed up by a subsidy paid out of the pockets of the taxpayer, I do not see how the hon. Gentleman's argument can hold any water. In this case, if they were relieved of this tax, they would require a considerably lower subsidy. It seems unfair that B.E.A. and B.O.A.C. should have to bear this tax when flying in this country.
There is another danger which may not have been adequately perceived. Great developments are being made with jet turbine engines. Some of these jet aircraft are now coming into service. They should be placed on the overseas routes but, because they do not attract this tax as they run on heavy hydrocarbon oils, it is possible that they may have to be put on the internal routes in order that B.E.A. can avoid this taxation. I hope that hon. Members opposite will perceive that it is an extremely dangerous precedent to tax aviation spirit, particularly as it affects flying in this country.
At least B.E.A. and B.O.A.C. are able to meet the cost of this tax by the Government subsidy. But it has a punitive effect on the wretched charter companies who do not get any subsidy and are struggling along bravely in an effort to make both ends meet and, indeed, filling in the gaps where the Government corporations are not able to operate at a profit.
I understand the reason for this. Hon. Members opposite may not admit it, but of course it is the truth. They want to drive private enterprise out altogether. They do not want to see the charter companies in operation. But that is a profoundly bad reason for imposing a taxation.
If we go further into this question, we find that its imposition is prohibiting private flying. Hon. Members opposite may say, "But this is a rich man's sport." Private flying is not a rich man's sport. Second hand light aircraft can be bought today at a cheaper price than a motor car. Two or three people can club together and buy an aeroplane. That is fine; but they cannot afford to fly it because they cannot afford to pay this tax on petrol. Hon. Members opposite may say that that is good because they do not want more petrol to be used; but it is a very cheap price to pay for keeping people in practice as pilots—people whom

the nation may need in time of danger. To exempt these people from this tax is a far cheaper way of encouraging them to fly than other methods under Government auspices.
The last point about this tax which I think is extremely bad is that it hits the aircraft industry. Of course, that industry will have to pass this part of their costs on to the consumer. Some of our purchases are abroad, and it may well be that if we go on like this we shall lose some of our foreign markets. But, as the Chancellor knows, the majority of the aircraft industry work under Government contract. Thus, the charges they pass on to the consumer are passed on to the British public. In fact, in imposing this tax we are making it necessary to increase the general level of taxation which we must pay for the re-armament programme.
Therefore, I submit that if the Chancellor were to think seriously of making a concession it would cost him very little. When we subtract the taxation which is taken from B.O.A.C. and B.E.A. and which the Government have to pay back, and the tax which they are gaining from the aircraft industry, a large amount of which will have to be borne from other taxation, only the charter companies and the private flyers are left. I submit that the amount of tax which the right hon. Gentleman gets from those sources is infinitesimal compared with the total with which he has to deal. If he made this concession he would make an extremely good gesture at the outset of what-is to be a long debate, showing that the Government were open-minded on this problem and were prepared to take our arguments into serious consideration.

Lady Tweedsmuir: I hope that my hon. Friend the Member for Stratford (Mr. Profumo) will forgive me if I do not follow up his interesting and constructive remarks on the effect of this tax on aviation. I do not want to detain the Committee for very long, but I should like to draw attention to some of the effects which this increase will have in the remoter areas of Scotland, if my English and Welsh colleagues will forgive me.
First, I should like to say that the three speeches which we have heard from the benches opposite have shown a complete misunderstanding of the reason why


we are opposing this Clause. It is just because of the re-armament programme that we oppose this Clause. We think that it will have a serious inflationary effect. It is the responsibility of the Government, and certainly our responsibility as an Opposition, to suggest that every effort should have been made to try, through increased production and Government economies, to secure the £35 million which is contemplated here.
7.0 p.m.
Let us take, first of all, the general effect on the consumer. One hon. Member opposite asked whether we had any evidence as to how the cost would be passed on to the consumer. I would like to draw the attention of the Committee to some of the outstanding organisations which have considered this matter already. The National Wholesale and Retail Provision Merchants' Association estimate that it will mean a further 5 per cent. increase in the cost of distribution. The Federation of Hardware Manufacturers estimate an increase of 4 per cent., and the Multiple Shop Federation an increase of 2½ per cent., with all that that means on the very hard-pressed housewife today.
Concerning the important question of building, the National Federation of Building Trades Employers have said that building costs generally will rise by one-half per cent., which will mean, in the case of a local authority house, an increase of £10 per house. I think that it is very likely that what was said by the "Economist," that great newspaper which we all try to quote, might well take place, and that about £30 million of this £35 million in taxation will be passed on to the consumer.
To give one example concerning fares in Scotland, it is estimated that the Glasgow Corporation's transport department will have £78,000 added to its costs, and hon. Members have already drawn attention to the increased charges which the British Transport Commission are proposing to put forward. My hon. Friend the Member for Edgbaston (Sir P. Bennett) talked of the effect on our exports, particularly in regard to the motor industry. May I remind hon. Members of a speech which was made by the President of the German Motor Trades Association

at Frankfurt quite recently, in which he said:
Germany's motor industry will prove to be a fully fledged competitor to Britain during the coming year. We are not hampered by taxation like the British industry. By the end of 1951, German cars will be sold abroad at prices below that of British models.
Apparently, German exports are now rising to a rate of 100,000 cars a year.
The Chancellor, in his Budget speech, said that the effect of the taxation which he proposes is only equivalent to 2 per cent. of operating costs alone. It is that word "alone" which I think we ought to challenge, because, of course, we cannot possibly consider these taxes without also considering increasing costs everywhere. The general effect is inflationary on all our production on re-armament, because transport enters into production at every stage.
In April, 1951, we had an increase in railway charges, which rose by 10 per cent., an extra 9d. on petrol and an extra 33⅓ per cent. on commercial vehicles. Here, then, I would put forward a plea for some of the remoter areas of Scotland, because the result of these increasing freight charges and transport and bus fares is that an enormous burden is placed on some of our outlying districts. I would like particularly to draw the attention of the Committee to Aberdeen and the North-East. The Economic Survey for Scotland states:
The unemployment percentage is high and has been rising.
In Aberdeen in particular, the reason is very largely because new industries will not come so far. The costs of transport are so excessive.
To give another example from the fishing industry, the Committee which was established by the Scottish Council (Development and Industry) to inquire into the Aberdeen fishing industry states, on page 21 in its report:
Transport charges bear very heavily on the cost of fish to the consumer.
That is a point which I hope will be noted by the hon. Lady the Member for Coatbridge (Mrs. Mann), who is not here at the moment. If one takes note of the charges for raw materials in relation to areas in the south and compares them with those in some remote districts, one sees what a tremendous burden it is. For instance, fuel oil for the Aberdeen trawlers is 21s. more per ton than it is in


the southern ports, entirely because of transport rates.
If the Government are as anxious as the Opposition to secure an increase in exports, I think they should, above all, pay attention to the prices of those exports. I feel that it is the responsibility of the Government themselves to search for economies which they can make before imposing a further burden on industries which they seek to encourage. One example has already been given by my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey), who suggested that one of the economies could be the merging of the Ministries of Civil Aviation and Transport.
We ought to have heard from hon. Members opposite—and I hope we shall hear before the end of the debate—that the Government are really trying to tackle this problem in a much more realistic way. If the Government do not wish Scotland to become a depressed area they must put their own house in order, rather than direct the taxpayer to do it for them.

The Financial Secretary to the Treasury (Mr. Douglas Jay): We have had a number of points of view put forward in the Committee today; but such arguments as I have heard have not altered our view that a moderate rise in the Petrol Duty is a suitable way of contributing to the cost of re-armament, together with the big increases in Profits Tax and Income Tax and some other less essential goods which were included in the Bill.
The oddest thing about today's debate is that Opposition speakers have hardly mentioned defence or re-armament throughout the afternoon. The right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) mentioned it only once, when he was putting some words into the mouth of my right hon. Friend the Chancellor. The hon. Member for Roxburgh and Selkirk (Mr. Macdonald) seemed to show a much more responsible attitude when he asked what was the alternative that any one was putting forward for raising this revenue. If the Opposition continue to support rearmament in theory and not in practice, I doubt whether their reputation for responsibility in the country will rise.
Is it, perhaps, the view of hon. Members opposite that indirect taxation should make no contribution to the defence bill

at all, and that the whole extra revenue should come out of increased taxation on profits and incomes? Or, alternatively, do they propose that the taxes on beer and tobacco should have been raised this year instead of the duty on petrol? We decided that, having placed the main burden of extra revenue in this Budget on profits, the remaining £35 million which we require should go on the indirect taxation side from petrol rather than from beer or tobacco. The petrol tax seems to us to satisfy all the following arguments, which I shall enumerate, and to be the only indirect tax that does.
First of all, the beer and tobacco taxes have, of course, been raised since 1939 by a much larger percentage than the Petrol Duty, and I really do not see why they should go still higher before there is some moderate increase in the petrol tax. Indeed, it was, of course, in that sense that my right hon. Friend said that the rise in this tax was "overdue." I may say that I entirely repudiate the doctrine, imputed to us by the hon. Member for Chippenham (Mr. Eccles), that every indirect tax should be operated to the point of diminishing returns. That is not our view at all. We raised this tax because we required to find the revenue.
Secondly, oil is a commodity which bulks very largely indeed on the import side of our balance of payments. The total imports in 1950 were about £150 million, and there is still a large dollar cost. The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), not in his speech today, but in an interesting speech which he made in the House in May, 1948, said this:
On the consumption side I would like to see the price of petrol rise by 2s. or 3s. a gallon and become known to every person as the financial luxury which we in this House know it to be from the point of view of the world economic situation."—[OFFICIAL REPORT, 11th May, 1948; Vol. 450, c. 2036.]
We do not go nearly as far as that, but we do believe that some restraint on the less essential uses of an imported commodity, selling here below its market price in most other countries, is necessary on grounds of general national economy.
Thirdly, in so far as petrol is used for private purposes, it is, surely, perfectly fair that it should make some contribution to defence costs; for the great expansion in motor traffic in this country since the war, desirable as it would be in normal peacetime as a sign of economic progress,


does, of course, in a time of re-armament, impose a considerable cost on the community, not merely in terms of imported oil, but also in a heavy demand for steel and engineering capacity, both of which are major bottlenecks in the re-armament programme, and also, of course, in road expenditure, which tends to swell the investment programme.
The right hon. and gallant Member for Gainsborough questioned our contention that the road traffic industry generally had not been damaged by last year's rise in tax. I do not think he will deny that there are many thousand more motor vehicles on the road today than there were a year ago. And when it is argued that some serious damage would be done to British exports generally, we all know that there has been a very large rise in the volume and value of exports since last year.
I fully agree that this rise in tax, in so far as it affects commercial road transport, will spread itself out very widely over all sorts of goods. But it will also spread itself out very thinly, and it seems to us that that in itself is a justification for this measure as a means of paying for defence, in addition to the steep increases in the taxes on profits. Surely some part of the cost of re-armament ought to be borne widely but thinly. Further, when we are computing the cost we ought not to exaggerate it; we ought to keep it in perspective.
It is a fact that this rise in the Petrol Duty this year will only add something like 2½ per cent. to transport costs, and, of course, transport costs are only one element in the cost of production of all the goods which the consumer buys. There is also some truth, I think, in what one of my hon. Friends said, that some part of this increase in costs could come out of profits, when we look at the level at which they are standing at the present time.

Mr. Osborne: I am surprised that the hon. Gentleman should make such a statement. I could understand it being made by hon. Members behind him. Surely he knows that if the £35 million were borne by industry the Treasury would lose £25,500,000, being the 70 per cent. of all profits which goes to the Chancellor by way of taxation. Other additional taxation would have to be imposed to fill the gap.

Mr. Jay: In so far as it was made out of profits, there would, naturally, be some drop in the yield of taxation; but the hon. Gentleman will appreciate that what I was arguing was that that would diminish the increased cost borne by the consumer, and I think he will agree that that is perfectly correct.
When we consider the small increase in transport costs for industry generally, it is perfectly fair to point out, I think, that the price of petrol in this country is still lower than in a good many other countries. The right hon. and gallant Member for Gainsborough was quite entitled to argue that some other running costs of transport abroad may be lower; but I, equally, am entitled to point out the fact that the price of petrol in a number of other countries is higher. We should also remember that in most cases the cost of petrol bought wholesale by commercial users is, on average, 3½d. a gallon below the ordinary price charged to other consumers. Therefore, I hope we shall not exaggerate the burden.
The hon. Member for Edgbaston (Sir P. Bennett) argued, as did one or two other hon. Members opposite, that light oils used in industrial materials by such industries as paint, cleaning, and so forth, should be exempted from this increase. I fully agree that one must consider very carefully before imposing any increase in tax on any industrial material. I think we are all at one about that. But the fact is that this tax on light hydrocarbon oils was never intended, as is sometimes erroneously supposed, as simply a tax on road transport. Indeed, the classical statement of the orthodox doctrine about this tax was enunciated by the right hon. Gentleman the Leader of the Opposition when he brought it into the world in 1928. He said then in answer to various pleas for exemptions:
If you start to give these exemptions, you will end by attempting to confine the burden of the Petrol Duty exclusively to the road user. You cannot possibly deal with cattle feedingstuffs without also dealing with dyeing and cleaning, with the manufacture of paint—with the making of gloves, and all these interesting and complicated trades of which we have heard. If you did that, you would, undoubtedly, have vitiated the tax…You will have undoubtedly destroyed the tax…"—[OFFICIAL REPORT, 1st May, 1928; Vol. 216, c. 1655–6.]
We agree with that general doctrine, as the right and proper foundation for this tax.
7.15 p.m.
Further, hon. Members opposite cannot really now argue that, as a matter of principle, no tax should be imposed on the materials of industry. The hon. Member for Mitcham (Mr. Carr) said, I think, if I heard him aright, that it must be wrong to put a tax on the materials of any industry. But it was, of course, the party opposite who, by the Import Duties Act, 1932, put import duties on a very wide range of imported industrial materials, including iron and steel, machine tools, cotton yarn, wool yarn and a number of chemicals, and so forth. Therefore, I cannot see how they can argue the matter today as one of principle.
Thirdly, we should not exaggerate the weight of tax by the time it has been spread over the cost of the final product in which oil may be used as a material of industry. The hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) very naturally put forward the claims of the cleaning industry.

Mr. Jennings: Will the hon. Gentleman explain to the Committee exactly what was the idea of imposing import duties? It was to stop commodities coming to this country from abroad in unfair competition with our own goods.

Mr. Jay: There may be all sorts of ideas in the hon. Gentleman's head, but it does not affect the principle. I was saying that, in the case of the cleaning industry, according to my information, the pre-Budget rate of oil duty represented only 2d. in the cost of cleaning a suit. In the case of paint, it represented about 2½ per cent.; and only 2 per cent. of the wholesale cost of printing ink, which is another commodity in which oils are used. It is, therefore, highly doubtful whether the benefit of any reduction in tax would, in fact, be passed on to the public by the industries using oils in industrial materials.

Colonel Gomme-Duncan: I do not think that the reduction would be passed on, but what I think would happen is that the cost would not have to go up, and in these days when most things are going up in price that is most important.

Mr. Jay: In any case, the amount involved is exceedingly small. Even so, if we were to exclude all non-road users from this tax, the yield would be reduced by

over £20 million a year; and it would, therefore, be necessary, in order to maintain the revenue, to increase the tax on the road user by something like 3d., to 2s. 1½d. a gallon. In addition, any exemption for types of light oil which are capable of use in road vehicles would unquestionably cause very considerable administrative difficulties. One or two hon. Members made light of this, but I can assure them that those difficulties are genuine. The hon. Member for Edg-baston said that we had probably gone to the officials and said, "You cannot do that, can you?" I can assure the hon. Gentleman that that was not the spirit in which we dealt with the matter.
The fact is that any scheme involving the existence of non-taxed oils would require more administrative staff to control it than are at present used in the entire administration of this tax.

Sir P. Bennett: Sir P. Bennett rose—

Mr. Jay: I must go on now. That would be a fairly large and extravagant use of manpower. It was said, I think by the hon. Member for Mitcham, that these difficulties had been overcome in other countries. It is perfectly true that some schemes of exemption are in force in other countries, but we are not satisfied from the information we have about them that they can be administered with the fairness and the efficiency which are expected in this country.
But I think that the strongest objection to a specific exemption for oil used in industrial materials is this. Various hon. Members today have argued, with quite a lot of force, that the petrol used in ordinary commercial transport is really a part of the general process of industrial production nowadays. Indeed, the hon. Member for Roxburgh and Selkirk had an Amendment on the Order Paper—it is one of those which have not been called—in page 1, line 24, in which he proposed to exempt not merely oil used in industrial processes but oil used in all forms of commercial transport, and he argued in favour of that today.
Obviously, there would be a lot of substance in that argument, if one went as far as exempting light oils used in manufacture. I do not think, therefore, that one could logically or justifiably grant exemption where the oil was actually used in manufacture, and withhold it from


general commercial road transport, which is, after all, nowadays so essential a part of the general manufacturing and distributing process.
Nevertheless, a strong case has been put forward today by various hon. Members, including the hon. Member for Edgbaston, in the case of exports, where light oils are used in manufacture and the British producer may be in active competition with a foreigner who, possibly, enjoys exemption. Already, under the existing law, there is provision for the duty paid in making goods which contain the oil at the time of exportation, such as, for instance, tins of paint, to be refunded by way of drawback. The administrative difficulties are not so great there.
I said last year that we proposed to examine whether this could be extended further, and I listened with interest to what the hon. Members for Edgbaston, Roxburgh and Selkirk, and others said today. It has been pointed out that there are some kinds of exported goods, such as rubber gloves, where the duty on the light oil used in their manufacture represents quite a substantial part of the final cost. The present arrangement for an export drawback applies, as I said, only where the oil is physically present at the time of export. Where the whole of the oil is evaporated away in the process of manufacture, so that none of it is left in the finished articles—and I understand there are a number of cases of that kind—the existing provisions for payment of drawback do not apply. We have gone to much trouble to find a solution to this problem, and I hope on Report to be able to move an Amendment empowering the Treasury to extend the present drawback provisions for exports in suitable cases by statutory order.

Captain Crookshank: A Government Amendment?

Mr. Jay: It will be a Government Amendment. I think that meets the strongest part of the case put forward; that relating to exports of certain goods. But we cannot agree, for reasons I have given, to exempt all oils used in industry, mainly because there is so little real distinction between these and petrol used in ordinary commercial transport.
The hon. and gallant Member for Macclesfield (Air Commodore Harvey) and another hon. Member argued the case for exempting the tax on aviation spirit, and said that 60 per cent. or 65 per cent. of aviation spirit was used in bench testing, if I heard him aright. We have considered the case of civil aviation in relation to this tax very carefully indeed, both last year and this year, and, as the hon. and gallant Member will know, we have already agreed to make an increase in the grant to flying clubs, where the need appears to us to be particularly great. Already, aviation spirit used by aviation companies in flying outside this country is exempt from petrol tax, as part of the general Customs principle that exported goods should not bear a tax of that kind. But we do not think it would be justifiable to single out what is, after all, only one form of transport in competition with other forms of transport, some of them also using petrol, for a complete exemption of this kind.
So far as the airways corporations are concerned, as a matter of accountancy and administration it is simpler, more straightforward, and more practical to allow the corporations to buy petrol at the general market price, including the tax, and then for the Government to pay what subsidy is necessary to cover that. That is the best practical arrangement.

Sir Wavell Wakefield: Is the hon. Gentleman aware that labour is ineffectively used in calculating whether an aircraft is to be used overseas or in England? Only today I was discussing the matter with the Chairman of British European Airways, who said that much saving could be made. Would the hon. Gentleman consult the Chairman and see in what way this can be done?

Mr. Jay: I can assure the hon. Gentleman that we have done so, and that we are very familiar with the views of those responsible for aviation companies. I would only say this. Any saving would certainly be counter-balanced by the additional manpower required in the Customs and Excise to look after the untaxed spirit that would have to be available. On balance, the cost would be greater.

Air Commodore Harvey: The hon. Gentleman referred to reasons for exempting flying clubs—

Mr. Jay: No, I said that we increased the grant.

Air Commodore Harvey: The Government increased the grant, which is the same thing. The Government impose the tax with one hand and take it away with the other. If that is done for flying clubs it ought to be done for other forms of aviation such as charter companies. In the case of aero engines which are going for export they are run for probably 20 hours on the bench. Ought they not to be exempt also?

7.30 p.m.

Mr. Jay: There is clearly a distinction between, on the one hand, the air corporations and the charter companies which, after all, are in commercial competition with other forms of transport, and, on the other, the flying clubs, to which that consideration does not apply. I do not think that we could justify to other forms of transport the giving of a discriminatory concession of that kind.
The hon. Members for Morecambe and Lonsdale (Sir I. Fraser) and Bridlington (Mr. Wood) put the case for war disabled men who, because of their disability, require either motor cars or invalid chairs, and they argued that this increased duty would impose a burden upon them. There we have to distinguish between the motor cars and the invalid chairs. In the case of the invalid chairs, it seems to us that the cost is so very small that no serious difficulty arises. According to my information, the increased duty this year does not amount to more than 1/17d. per mile, and we therefore do not think that the hardship, or the cost, is more than trivial.
The Committee will remember that, in the case of the motor cars which are provided by the Ministry of Pensions for seriously disabled persons, it was decided a year ago to raise the annual grant which the Ministry gives for general expenses of running the car from £45 to £50 a year on account of the duty. We have already considered, of course, whether this year's increase in duty would justify any corresponding further rise in the grant. There we have to remember that, as has already been mentioned, the Ministry of Pensions have made various concessions to the more seriously disabled persons, worth something rather over £600,000 a year, much

of which will go to the very people who are using these cars. In addition, the £5 rise in the allowance last year was, in our view, pretty generous in relation, not merely to the increase in Petrol Duty a year ago but to other increases in costs. I think that £50 a year to cover the costs of a car is probably, as perhaps hon. Members will agree, on the fairly generous side.
Therefore, we originally came to the conclusion that, on the strict finances of the question, no further increase in this allowance was justified, as my right hon. Friend the Minister of Pensions said this week. However, having listened to the case made today, I am bound to say that I feel, myself, that we should not take even the slightest risk of doing injustice to these particular members of the community, and I therefore propose, before the Report stage, to consult further with my right hon. Friend the Minister of Pensions to make absolutely sure that the concessions already given adequately cover the costs involved.
I think that, for all the reasons I have advanced this afternoon, and on the understanding that we attempt to meet the Committee in those two particulars hon. Members will agree that no serious alternative has been put forward which would be fairer and better for raising this £35 million of revenue, which we must have for defence. I therefore hope that the Committee will agree to approve the Clause.

Mr. Geoffrey Lloyd: The fact that I rise now does not in any way indicate that I feel that the debate ought to come to a close. In fact, there may be other speeches from this side of the House, and from this bench. However, I think the Committee will appreciate that as a matter of courtesy to the Financial Secretary there should be an immediate reply from this bench, in view of the defence of this duty that he has made.
Of course, it is open to any hon. Member to select what he regards as the oddest feature of the debate so far, and the hon. Gentleman selected one feature. I should like to suggest a different feature. I think that perhaps the oddest feature of the debate so far has been the almost total silence of hon. Members opposite in not making the slightest effort to voice the grievances of the taxpayer, or, on the


other hand, to urge reasonable concessions from the Government on behalf of particular classes of taxpayers affected by this Clause. It has therefore come about that on two topics today—first of all, the war pensioners invalid carriages, and, secondly, the industrial use of petroleum oils—it is due entirely to the representations that have come from my hon. Friends that concessions have been made by His Majesty's Government.

Mr. Jay: I can assure the right hon. Gentleman that I have had correspondence from my hon. Friends on these matters.

Mr. Lloyd: Apparently the operations of the party opposite now take place entirely in secret.
While welcoming particularly the concession that has been made to my hon. Friend the Member for Bridlington (Mr. Wood), and possibly other more secretive hon. Gentlemen opposite who are concerned in the matter, I say at once that I do not regard the concession made with regard to industrial spirits as satisfactory. I think it is in the right direction, but I do not think it is satisfactory, and for this reason. I do not believe it is enough for the Government to tell us that they cannot make the concession because the oils concerned are very much like the ordinary oils used in transport. After all, there is already a concession for the heavier hydrocarbon oils used in industry, and there is a concession for these lighter oils when they are ascertainable in an export product. Now we have this further concession made today.
Although I do not believe that it would be right to suggest, as my hon. Friend did, that the Chancellor almost indicated to his advisers that he would not welcome an administrative solution to this problem, and while I think that is going rather too far, I do know very well from my own Ministerial experience, and from having watched my colleagues, that the degree of determination with which a Minister approaches his advisers to work for a technical administrative solution has a very great bearing on whether or not the solution is produced. I therefore think that it would be possible to reach a more tidy solution, and one very likely involving a smaller amount of administrative work, if a clean sweep were made

in this field, where it is quite clear that the oils enter into the costs of production of numerous articles, rather than this kind of niggling, half-way concession announced by the hon. Gentleman this afternoon.
We ought to take into account the fact that there has been something in the nature of a minor industrial revolution in the use of these industrial petroleum solvents in recent years. Their use has expanded by over 100 per cent. since before the war. The plastic industry makes more use of them, and the fabric the former President of the Board of Trade was to be seen wearing in this House, and, we believe, on the Paris boulevards, was also one of those things in which a good deal of these industrial petroleum solvents was required. However, I will not pursue that matter any further but turn to the broader general argument.
I should like to remind the Committee that we have had a very great reversal in the reasons brought forward this year and last for these two consecutive increases in the Petrol Duty, increases which now bring the duty on petrol alone to a sum larger than the cost of the petrol including the duty before the war. These last two increases have a yield of £100 million, a very important fiscal development.
Sir Stafford Cripps, to whom we all extend the very best wishes with regard to his health, when he introduced his Budget last year suggested it was a good tax not so much from the point of view of Revenue, which he did not need and which he did not even mention as a justification, but that it was a kind of pearl of the planners which did very different things. In particular, as my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) mentioned, he said that by forcing economies in the commercial field it was going to enable him to do a little better by the private motorist by making a small increase in the basic ration.
It is a sufficient indication of how far we have come from that time that on this occasion a Chancellor quite bluntly justified the increase on Revenue grounds. The Financial Secretary to the Treasury added a new point as far as this year is concerned, or rather he returned to an older point when he brought forward the


argument about the oil import. This he did on two grounds, as I understand it. The first was that it is a big import which, on the grounds of general economy, should be reduced. Secondly, that the import should be reduced because of the dollars involved.
It is a little hard that the point about dollars should be brought up again when almost a year ago the then Chancellor and the Minister of Fuel and Power, when petrol rationing was abolished and a great increase in petrol consumption was envisaged, said it would involve no appreciable extra dollar burden. Therefore, the statement we have heard today is not altogether consistent with the statement made when petrol rationing was abolished.
In general, I also do not think it accords with the special position of this country in relation to oil deposits, royalties and so on about which, for obvious reasons, I do not want to go into too much detail. I know that when we considered this problem towards the end of the war petrol imports and exports were not regarded as being on the ordinary basis of commercial accounts. From the Treasury angle, exports from other parts of the world were actually regarded as coming within the category of exports from this country. If that is the case, surely we ought to have some credit since oil imports are an easier problem for us than normal imports.
The Financial Secretary to the Treasury has brought forward one other very important justification for this duty, and he used a special phrase in earlier debates. He said that not only was it a Revenue producer, but that it would have the effect of drawing off £35 million of purchasing power. I do not know whether the Committee likes it, but I do not care particularly for this medical, almost veterinary metaphor as applied to our fiscal affairs. I understand the Chancellor says it is apt. Apparently the body economic is so gorged with inflationary pressure that it needs some kind of financial bleeding, and this duty is produced as a convenient financial leech to suck away £35 million of purchasing power.
7.45 p.m.
I think part of it falls directly on the private motorist, but part of it really is only drawn away after it has indirectly

raised costs in a number of road transport and other industries. I suggest very considerable economic doubts arise as to which of these two processes is taking place. I would remind the Committee of what my right hon. and gallant Friend the Member for Gainsborough said earlier, that 16 per cent. of petrol is used by private cars and about 84 per cent. by commercial cars and lorries and in industry. Therefore, the burden of this duty falls in those same proportions on the private motorist, on one hand, and on the lorries and buses and industry, on the other.
So far as the private motorist is concerned, I think we must agree this drawing off process mentioned by the Financial Secretary takes place directly—painfully no doubt for the motorist, but successfully from the point of view of the Chancellor. That does not mean that we do not very much regret this extra burden, particularly in view of the large numbers of people—I think about two-thirds—who still have pre-war cars that are unduly heavy on petrol consumption.
But I do not think hon. Members opposite do justice to our motives with regard to this matter. We seriously feel this great increase of fiscal burdens on petrol are important, not only from the point of view of the existing motorist but with regard to the growth of the motoring habit in this country in the future. A great deal of progress was made in this growth before the war, and it is rather humilitating to think that in America motoring is taken for granted as part of the standard of life of working men, while here not only is that not the case but increasing fiscal burdens are putting it off further away to the future.
I do not think the Chancellor is really wise continually to minimise the burden he is placing on motorists by perpetually giving out figures which seek to show that after everything he has done petrol is still cheaper here than in any other European country. That is not true of all European countries, and there is another factor already mentioned on which I may cite the authority of the Minister of Local Government and Planning. I see that in 1945, when he was considering this matter, he expressly said one had to consider the burden of motor taxation from a global point of view, and that when one was considering—

The Minister of Local Government and Planning (Mr. Dalton): I do not believe I ever used the word "global." It is not in my vocabulary.

Mr. Lloyd: I feel as if I were back at Cambridge being lectured by the right hon. Gentleman, but I accept his rebuke. What he said was that one had to consider the burdens of the duty on fuel in relation to the annual licensing duty. Therefore, I feel that from a duet of Winchester economists, so to speak—I refer to the two at the Treasury—it is rather beneath the high level of the argument to mention the price of petrol in Europe only without also mentioning the levels of the annual licence duty.
The fact is, of course, that while right hon. Gentlemen opposite are so fond of quoting France and Italy they must remember that for a 10 h.p. popular car the duty here is £10 and for the pre-war car £12 10s., whereas in Italy the licence duty is only £5 and in France there is no annual duty at all. I think by a reasonable extension of the principles enunciated by the Minister of Local Government and Planning we are also entitled to take the level of Purchase Tax into consideration, and here, if nowhere else, this country leads the world. With Purchase Tax at 66⅔ per cent. nobody else in the world begins to approach us.
When my right hon. and gallant Friend the Member for Gainsborough made calculations to bring all these factors into account in regard to an annual mileage of 5,000 miles, the hon. Member for Stetchford (Mr. Jenkins) said there might be something in the calculation, but he thought that it was quite wrong to base it on such a small figure as 5,000 miles because the fixed charges represented by the annual licence duty or by Purchase Tax would have an unduly great effect on a calculation of that kind.
I can tell him—I do not think he is here—and I can inform the Committee that even if that calculation is made on 10,000 miles a year, which I think the Committee will agree is a reasonable mileage and which is a rather large mileage for the ordinary popular car, it remains a fact that, with the exception of Spain and Italy, motoring taxes in this country are higher than in any Other country in Europe—very much higher. I feel that if the Chancellor and his henchman are to produce these figures again, then in

the interests of a high standard of controversy they should give equal prominence, in talking about petrol prices, to the fact that the level of licensing taxes and purchase taxes in Europe is so much lower than in this country.
I shall not pursue the matter further tonight, because I do not want to take up more time. I would conclude by pointing out that every spring nowadays we have the Budget, we have the cuckoo we have an increase in rail charges and we have an increase in the Petrol Duty. It is asking a great deal of hon. Members on this side for them to be expected to believe that there is no connection whatever between the last two items in that list.
Of course, one starts with a certain amount of sympathy for the Railway Executive, because they also have their problem of fuel. Coal is not taxed, of course, but the price has risen very much. The increase adds very much to their costs of operation. But one's sympathy is somewhat reduced when one realises, from studying reports, that the rise in the price of coal is very often produced by the previous rise in rail charges. It comes about that the Railway Executive are labouring under the very considerable handicap of a fuel charge which is over three times larger than it was before the war.
But then the Chancellor comes along and notices that their competitors, the road transport industry and the road passenger services, are providing a similar service and that their fuel, petrol, has increased in price by only 50 per cent. by comparison with before the war. In two successive years Socialist Chancellors have done a very great deal to redress that balance. But we cannot regard that as the right way to conduct these matters, and we remain very much opposed to this tax.

Mr. R. J. Taylor (Lord Commissioner of the Treasury): rose in his place and claimed to move, "That the Question be now put."

The Chairman: The Question is, "That the Question"—

Several Hon. Members: rose—

The Chairman: Mr. Jennings.

Mr. Jennings: Earlier this afternoon. Major Milner, you ruled that an Amendment was not being accepted because it


was out of order, and I took the liberty of asking you whether you would allow a full and comprehensive discussion on this subject. You assured me that you would do so, and in view of that—

The Chairman: Order. I am fully seized with the hon. Member's point. Although I am under no obligation to indicate it, in my view there has been a very full debate, in which something like 30 hon. Members have taken part, which has extended over a period of more than four hours. In those circumstances I must accept the Closure.

Several Hon. Members: Several Hon. Members rose—

The Chairman: No point of order arises.

Mr. Jennings: May I ask for your guidance, Major Milner?

The Chairman: Certainly.

Mr. Jennings: Thank you, Major Milner. I feel that if the debate is closed at this stage and you form the opinion that a great deal has already been said, it is scarcely giving an opportunity to those Members who perhaps have some important issues to raise on this subject.

The Chairman: The hon. Member said he was asking for my guidance instead of which, as I understood it, he criticised my Ruling. I have given that Ruling and I must abide by it. The Question is—

Mr. Jennings: Mr. Jennings rose—

The Chairman: Order.

Mr. W. Fletcher: May I ask for your guidance, Major Milner?

Mr. Frederic Harris: It is a very bad show.

The Chairman: Mr. Fletcher.

Mr. W. Fletcher: You said that in your view ample debate had taken place, Major Milner, but there are a great many hon. Members who, if the previous methods of handling the affairs at this stage of the Bill had taken place, would undoubtedly have had an opportunity which is now denied them. I have a point on behalf of the whole textile area which I wish to put before you, and which has definitely been omitted from the debate so far. It is of very great importance. I should therefore like your guidance on how I can raise this issue?

The Chairman: I am sorry the hon. Member has not caught the eye of the Chair, but he will have an opportunity on other stages of the Bill.

Mr. Jennings: Call this democracy?

Question put, "That the Question be now put."

The Committee divided: Ayes, 299. Noes. 289.

Division No. 82.]
AYES
[7.57 p.m.


Acland, Sir Richard
Brcughton, Dr. A. D. D.
Davies, Harold (Leek)


Adams, Richard
Brown, Rt. Hon. George (Belper)
Davies, Stephen (Merthyr)


Albu, A. H.
Brown, Thomas (Ince)
de Freitas, Geoffrey


Allen, Arthur (Bosworth)
Burke, W. A.
Deer, G.


Allen, Scholefield (Crewe)
Burton, Miss E.
Delargy, H. J.


Anderson, Alexander (Motherwell)
Butler, Herbert (Hackney, S.)
Diamond, J.


Anderson, Frank (Whitehaven)
Callaghan, L. J.
Dodds, N. N.


Awbery, S. S.
Carmichael, J.
Donnelly, D.


Ayles, W. H.
Castle, Mrs. B. A.
Driberg, T. E. N.


Bacon, Miss Alice
Champion, A. J.
Dugdale, Rt. Hon John (W. Bromwich)


Baird, J.
Chetwynd, G. R.
Dye, S.


Balfour, A.
Clunie, J.
Ede, Rt. Hon. J. C.


Barnes, Rt. Hon. A. J.
Cocks, F. S.
Edelman, M.


Bartley, P.
Coldrick, W.
Edwards, John (Brighouse)


Bellenger, Rt. Hon. F. J.
Collindridge, F.
Edwards, Rt. Hon. Ness (Caerphilly)


Benn, Wedgwood
Cook, T. F.
Edwards, W. J. (Stepney)


Benson, G.
Cooper, Geoffrey (Middlesbrough, W.)
Evans, Albert (Islington, S. W.)


Beswick, F.
Cooper, John (Deptford)
Evans, Edward (Lowestoft)


Bevan, Rt. Hon. A. (Ebbw Vale)
Cove, W. G.
Evans, Stanley (Wednesbury)


Bing, G. H. C.
Craddock, George (Bradford, S.)
Ewart, R.


Blenkinsop, A.
Crawley, A.
Fernyhough, E.


Blyton, W. R.
Crosland, C. A. R.
Field, Capt. W. J.


Boardman, H.
Crossman, R. H. S.
Finch, H. J.


Booth, A.
Cullen, Mrs. A.
Fletcher, Eric (Islington, E.)


Bottomley, A. G.
Daines, P.
Follick, M.


Bowles, F. G. (Nuneaton)
Dalton, Rt. Hon. H.
Foot, M. M.


Braddock, Mrs Elizabeth
Darling, George (Hillsborough)
Forman, J. C.


Brook, Dryden (Halifax)
Davies, A. Edward (Stoke, N.)
Fraser, Thomas (Hamilton)


Brooks, T. J. (Normanton)
Davies, Ernest (Enfield, E.)
Freeman, John (Watford)




Freeman, Peter (Newport)
Lipton, Lt.-Col. M.
Ross, William


Gaitskell, Rt. Hon. H. T. N.
Logan, D. G.
Royle, C.


Ganley, Mrs. C. S.
Longden, Fred (Small Heath)
Shawcross, Rt. Hon. Sir Hartley


Gibson, C. W.
McAllister, G.
Shinwell, Rt. Hon. E.


Gilzean, A.
MacColl, J. E.
Shurmer, P. L. E.


Glanville, James (Consett)
McGhee, H. G.
Silverman, Julius (Erdington)


Gooch, E. G.
McGovern, J.
Silverman, Sydney (Nelson)


Gordon-Walker, Rt. Hon. P. C.
McInnes, J.
Simmons, C. J.


Greenwood, Anthony (Rossendale)
Mack, J. D.
Slater, J.


Greenwood, Rt. Hn. Arthur (Wakefield)
McKay, John (Wallsend)
Smith, Ellis (Stoke, S.)


Grenfell, D. R.
Mackay, R. W. G. (Reading, N.)
Smith, Norman (Nottingham, S.)


Grey, C. F.
McLeavy, F.
Snow, J. W.


Griffiths, David (Rother Valley)
MacMillan, Malcolm (Western Isles)
Sorensen, R. W.


Griffiths, Rt. Hon. James (Llanelly)
McNeil, Rt. Hon. H.
Soskice, Rt. Hon. Sir Frank


Griffiths, William (Exchange)
MacPherson, Malcolm (Stirling)
Sparks, J. A.


Gunter, R. J.
Mainwaring, W. H.
Steele, T.


Hale, Joseph (Rochdale)
Mallalieu, E. L. (Brigg)
Stewart, Michael (Fulham, E.)


Hale, Leslie (Oldham, W.)
Mallalieu, J. P. W. (Huddersfield, E.)
Stokes, Rt. Hon. R. R.


Hall, John (Gateshead, W.)
Mann, Mrs. Jean
Strachey, Rt. Hon. J.


Hall, Rt. Hon. Glenvil (Colne Valley)
Manuel, A. C.
Strauss, Rt. Hon. George (Vauxhall)


Hamilton, W. W.
Marquand, Rt. Hon. H. A.
Stross, Dr. Barnett


Hannan, W.
Mathers, Rt. Hon. G.
Summerskill, Rt. Hon. Edith


Hardman, D. R.
Mellish, R. J.
Sylvester, G. O.


Hardy, E. A.
Messer, F.
Taylor, Bernard (Mansfield)


Hargreaves, A.
Middleton, Mrs. L.
Taylor, Robert (Morpeth)


Harrison, J.
Mikardo, Ian.
Thomas, David (Aberdare)


Hastings, S.
Mitchison, G. R.
Thomas, George (Cardiff)


Hayman, F. H.
Moeran, E. W.
Thomas, Iorwerth (Rhondda, W.)


Henderson, Rt. Hon. Arthur (Tipton)
Monslow, W.
Thomas, Ivor Owen (Wrekin)


Herbison, Miss. M.
Moody, A. S.
Thorneycroft, Harry (Clayton)


Hewitson, Capt. M.
Morgan, Dr. H. B.
Thurtle, Ernest


Hobson, C. R.
Morley, R.
Timmons, J.


Holman, P.
Morris, Percy (Swansea, W.)
Tomney, F.


Holmes, Horace (Hemsworth)
Mort, D. L.
Turner-Samuels, M.


Houghton, D.
Moyle, A.
Ungoed-Thomas, Sir. Lynn


Hoy, J.
Mulley, F. W.
Usborne, H.


Hubbard, T.
Murray, J. D.
Vernon, W. F.


Hudson, James (Ealing, N.)
Nally, W.
Viant, S. P.


Hughes, Emrys (S. Ayrshire)
Neal, Harold (Bolsover)
Wallace, H. W.


Hughes, Hector (Aberdeen, N.)
Noel-Baker, Rt. Hon. P. J.
Watkins, T. E.


Hughes, Moelwyn (Islington, N.)
O'Brien, T.
Webb, Rt. Hon. M. (Bradford, C.)


Hynd, H. (Accrington)
Oldfield, W. H.
Weitzman, D.


Hynd, J. B. (Attercliffe)
Oliver, G. H.
Wells, William (Walsall)


Irvine, A. J. (Edge Hill)
Orbach, M.
West, D. G.


Irving, W. J. (Wood Green)
Padley, W. E.
Wheatley, Rt. Hon. John (Edinb'gh E.)


Isaacs, Rt. Hon. G. A.
Paget, R. T.
White, Mrs. Eirene (E. Flint)


Janner, B.
Paling, Rt. Hon. W. (Dearne Valley)
While, Henry (Derbyshire, N. E.)


Jay, D. P. T.
Paling, Will T. (Dewsbury)
Whiteley, Rt. Hon. W.


Jeger, George (Goole)
Pannell, T. C.
Wigg, G.


Jeger, Dr. Santo (St. Pancras, S.)
Pargiter, G. A.
Wilcock, Group Capt. C. A. B.


Jenkins, R. H.
Parker, J.
Wilkes, L.


Johnson, James (Rugby)
Paton, J.
Wilkins, W. A.


Johnston, Douglas (Paisley)
Pearson, A.
Willey, Frederick (Sunderland)


Jones, David (Hartlepool)
Peart, T. F.
Willey, Octavius (Cleveland)


Jones, Frederick Elwyn (W. Ham, S.)
Poole, C.
Williams, David (Neath)


Jones, Jack (Rotherham)
Popplewell, E.
Williams, Rev. Llywelyn (Abertillery)


Jones, William Elwyn (Conway)
Porter, G.
Williams, Ronald (Wigan)


Keenan, W.
Price, Philips (Gloucestershire, W.)
Williams, Rt. Hon. Thomas (Don V'lly)


Kenyon, C.
Proctor, W. T.
Williams, W. T. (Hammersmith, S.)


Key, Rt. Hon. C. W.
Pryde, D. J.
Wilson, Rt. Hon. Harold (Huyton)


King, Dr. H. M.
Pursey, Cmdr. H.
Winterbottom, Ian (Nottingham, C.)


Kinghorn, Sqn. Ldr. E.
Rankin, J.
Winterbottom, Richard (Brightside)


Kinley, J.
Rees, Mrs. D.
Wise, F. J.


Kirkwood, Rt. Hon. D.
Reeves, J.
Woodburn, Rt. Hon. A.


Lang, Gordon
Reid, Thomas (Swindon)
Woods, Rev. G. S.


Lee, Frederick (Newton)
Reid, William (Camlachie)
Wyatt, W. L.


Lee, Miss Jennie (Cannock)
Rhodes, H.
Yates, V. F.


Lever, Harold (Cheetham)
Richards, R.
Younger, Hon. K.


Lever, Leslie (Ardwick)
Robens, Rt. Hon. A.



Lewis, Arthur (West Ham, N.)
Roberts, Goronwy (Caernarvonshire)
TELLERS FOR THE AYES:


Lewis, John (Bolton, W.)
Robertson, J. J. (Berwick)
Mr. Bowden and


Lindgren, G. S.
Rogers, George (Kensington, N.)
Mr. Kenneth Robinson




NOES


Aitken, W. T.
Baldock, Lt.-Cmdr. J. M.
Bevins, J. R. (Liverpool, Toxteth)


Alport, C. J. M.
Baldwin, A. E.
Birch, Nigel


Amery, Julian (Preston, N.)
Banks, Col. C.
Bishop, F. P.


Amory, Heathcoat (Tiverton)
Baxter, A. B.
Black, C. W.


Arbuthnot, John
Beamish, Maj. Tufton
Boles, Lt.-Col. D. C. (Wells)


Ashton, H. (Chelmsford)
Bell, R. M.
Bossom. A. C.


Assheton, Rt. Hon. R. (Blackburn, W.)
Bennett, Sir Peter (Edgbaston)
Boyd-Carpenter, J. A.


Astor, Hon. M. L.
Bennett, Dr. Reginald (Gosport)
Boyle, Sir Edward


Baker, P. A. D.
Bennett, William (Woodside)
Bracken, Rt. Hon. B.







Braine, B. R.
Hill, Mrs. E. (Wythenshawe)
Nutting, Anthony


Braithwaite, Sir Albert (Harrow, W.)
Hinchingbrooke, Viscount
Oakshott, H. D.


Braithwaite, Lt.-Cr. G. (Bristol, N. W.)
Hirst, Geoffrey
Odey, G. W.


Bromley-Davenport, Lt.-Col. W.
Hollis, M. C.
O'Neill, Rt. Hon. Sir Hugh


Browne, Jack (Govan)
Holmes, Sir Stanley (Harwich)
Ormsby-Gore, Hon. W. D.


Buchan-Hepburn, P. G. T.
Hope, Lord John
Orr, Capt. L. P. S.


Bullock, Capt. M.
Hopkinson, H. L. D'A.
Orr-Ewing, Charles Ian (Hendon, N.)


Bullus, Wing Commander, E. E.
Hornsby-Smith, Miss P.
Orr-Ewing, Ian L. (Weston-super-Mare)


Burden, F. A.
Horsbrugh, Rt. Hon. Florence
Osborne, C.


Butcher, H. W.
Howard, Gerald (Cambridgeshire)
Peake, Rt. Hon. O.


Butler, Rt. Hn. R. A. (Saffron Walden)
Howard, Greville (St. Ives)
Perkins, W. R. D.


Carr, Robert (Mitcham)
Hudson, Sir Austin (Lewisham, N.)
Peto, Brig. C. H. M.


Carson, Hon. E.
Hudson, Rt. Hon. Robert (Southport)
Pickthorn, K.


Channon, H.
Hudson, W. R. A. (Hull, N.)
Pitman, I. J.


Clarke, Col. Ralph (East Grinstead)
Hutchinson, Geoffrey (Ilford, N.)
Powell, J. Enoch


Clarke, Brig. Terence (Portsmouth, W.)
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Prescott, S.


Clyde, J. L.
Hutchison, Col. James (Glasgow)
Price, Henry (Lewisham, W.)


Colegate, A.
Hyde, Lt.-Col. H. M.
Prior-Palmer, Brig. O.


Conant, Maj. R. J. E.
Hylton-Foster, H. B.
Profumo, J. D.


Cooper, Sqn. Ldr. Albert (Ilford, S.)
Jeffreys, General Sir George
Raikes, H. V.


Cooper-Key, E. M.
Jennings, R.
Rayner, Brig. R.


Corbett, Lt.-Col. Uvedale (Ludlow)
Johnson, Howard (Kemptown)
Redmayne, M.


Craddock, Beresford (Spelthorne)
Jones, A. (Hall Green)
Remnant, Hon. P.


Cranborne, Viscount
Joynson-Hicks, Hon. L. W.
Renton, D. L. M.


Crookshank, Capt. Rt. Hon. H. F. C.
Kaberry, D.
Roberts, Emrys (Merioneth)


Crosthwaite-Eyre, Col. O. E.
Kerr, H. W. (Cambridge)
Roberts, Maj. Peter (Heeley)


Crouch, R. F.
Kingsmill, Lt.-Col. W. H.
Robertson, Sir David (Caithness)


Crowder, Capt. John (Finchley)
Lambert, Hon. G.
Robinson, Roland (Blackpool, S.)


Crowder, Petre (Ruislip—Northwood)
Lancaster, Col. C. G.
Robson-Brown, W.


Cundiff, F. W.
Langford-Holt, J.
Rodgers, John (Sevenoaks)


Cuthbert, W. N.
Law, Rt. Hon. R. K.
Roper, Sir Harold


Darling, Sir William (Edinburgh, S.)
Leather, E. H. C.
Ropner, Col. L.


Davidson, Viscountess
Legge-Bourke, Maj. E. A. H.
Russell, R. S.


Davies, Rt. Hon. C. (Montgomery)
Lennox-Boyd, A. T.
Ryder, Capt. R. E. D.


Davies, Nigel (Epping)
Lindsay, Martin
Salter, Rt. Hon. Sir Arthur


de Chair, Somerset
Linstead, H. N.
Sandys, Rt. Hon. D.


De la Bère, R.
Llewellyn, D.
Savory, Prof. D. L.


Deedes, W. F.
Lloyd, Rt. Hn. Geoffrey (King's N'rt'n)
Scott, Donald


Digby, S. Wingfield
Lloyd, Maj. Guy (Renfrew, E.)
Shepherd, William


Dodds-Parker, A. D.
Lloyd, Selwyn (Wirral)
Smiles, Lt.-Col. Sir Walter


Donner, P. W.
Lockwood, Lt.-Col. J. C.
Smithers, Peter (Winchester)


Douglas-Hamilton, Lord Malcolm
Longden, Gilbert (Herts, S. W.)
Smithers, Sir Waldron (Orpington)


Drayson, G. B.
Low, A. R. W.
Smyth, Brig. J. G. (Norwood)


Dugdale, Maj. Sir Thomas (Richmond)
Lucas, Sir Jocelyn (Portsmouth, S.)
Snadden, W. McN.


Duncan, Capt. J. A. L.
Lucas, P. B. (Brentford)
Soames, Capt. C.


Dunglass, Lord
Lucas-Tooth, Sir Hugh
Spearman, A. C. M.


Duthie, W. S.
Lyttelton, Rt. Hon. O.
Spence, H. R. (Aberdeenshire, W.)


Eccles, D. M.
McAdden, S. J.
Spens, Sir Patrick (Kensington, S.)


Eden, Rt. Hon. A.
McCallum, Major D.
Stanley, Capt. Hon. Richard (N. Fylde)


Elliot, Rt. Hon. W. E.
McCorquodale, Rt. Hon. M. S.
Stevens, G. P.


Erroll, F. J.
Macdonald, A. J. F. (Roxburgh)
Steward, W. A. (Woolwich, W.)


Fisher, Nigel
Macdonald, Sir Peter (I. of Wight)
Stewart, Henderson (Fife, E.)


Fletcher, Walter (Bury)
Mackeson, Brig. H. R.
Stoddart-Scott, Col. M.


Fort, R.
McKibbin, A.
Storey, S.


Foster, John
McKie, J. H. (Galloway)
Strauss, Henry (Norwich, S.)


Fraser, Hon. Hugh (Stone)
Maclay, Hon. John
Stuart, Rt. Hon. James (Moray)


Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Maclean, Fitzroy
Summers, G. S.


Fyfe, Rt. Hon. Sir David Maxwell.
MacLeod, Iain (Enfield, W.)
Sutcliffe, H.


Gage, C. H.
MacLeod, John (Ross and Cromarty)
Taylor, Charles (Eastbourne)


Galbraith, Cmdr. T. D. (Pollok)
Macmillan, Rt. Hon. Harold (Bromley)
Taylor, William (Bradford, N.)


Galbraith, T. G. D. (Hillhead)
Macpherson, Major Niall (Dumfries)
Teeling, W.


Gammans, L. D.
Maitland, Cmdr. J. W.
Teevan, T. L.


Garner-Evans, E. H. (Denbigh)
Manningham-Buller, R. E.
Thomas, J. P. L. (Hereford)


Gates, Maj. E. E.
Marlowe, A. A. H.
Thompson, Lt.-Cmdr. R. (Croydon, W.)


Glyn, Sir Ralph
Marples, A. E.
Thorneycroft, Peter (Monmouth)


Gomme-Duncan, Col. A.
Marshall, Douglas (Bodmin)
Thornton-Kemsley, Col. C. N.


Gridley, Sir Arnold
Marshall, Sidney (Sutton)
Thorp, Brig. R. A. F.


Grimston, Hon. John (St. Albans)
Maude, Angus (Ealing S.)
Tilney, John


Grimston, Robert (Westbury)
Maude, John (Exeter)
Touche, G. C.


Harden, J. R. E.
Maudling, R.
Turner, H. F. L.


Hare, Hon. J. H. (Woodbridge)
Medlicott, Brig. F.
Turton, R. H.


Harris, Frederic (Croydon, N.)
Mellor, Sir John
Tweedsmuir, Lady


Harris, Reader (Heston)
Molson, A. H. E.
Vane, W. M. F.


Harvey, Air Cdre. A. V. (Macclesfield)
Monckton, Sir Walter
Vaughan-Morgan, J. K.


Harvey, Ian (Harrow, E.)
Moore, Lt.-Col. Sir Thomas
Vosper, D. F.


Harvie-Watt, Sir George
Morris, Hopkin (Carmarthen)
Wakefied, Edward (Derbyshire, W.)


Hay, John
Morrison, John (Salisbury)
Wakefield, Sir Wavell (Marylebone)


Head, Brig. A. H.
Morrison, Rt. Hon. W. S. (Cirencester)
Walker-Smith, D. C.


Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert
Mott-Radolyffe, C. E.
Ward, Hon. George (Worcester)


Heald, Lionel
Nabarro, G.
Ward, Miss I. (Tynemouth)


Heath, Edward
Nicholls, Harmar
Waterhouse, Capt. Rt. Hon. C.


Henderson, John (Cathcart)
Nicholson, G.
Watkinson, H.


Hicks-Beach, Maj. W. W.
Nield, Basil (Chester)
Webbe, Sir H. (London &amp; Westminster)


Higgs, J. M. C.
Noble, Cmdr. A. H. P.
White, Baker (Canterbury)


Hill, Dr. Charles (Luton)
Nugent, G. R. H.
Williams, Charles (Torquay)







Williams, Gerald (Tonbridge)
Winterton, Rt. Hon Earl
TELLERS FOR THE NOES:


Williams, Sir Herbert (Croydon, E.)
Wood, Hon. R.
Mr. Studholme and


Wills, G.
York, C.
Major Wheatley.


Wilson, Geoffrey (Truro)

Question put accordingly, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 304; Noes, 286.

Division No. 83.]
AYES
[8.17 p.m.


Acland, Sir Richard
Edwards, W. J. (Stepney)
Kenyon, C.


Adams, Richard
Evans, Albert (Islington, S. W.)
Key, Rt. Hon. C. W.


Albu, A. H.
Evans, Edward (Lowestoft)
King, Dr. H. M.


Allen, Arthur (Bosworth)
Evans, Stanley (Wednesbury)
Kinghorn, Sqn. Ldr. E.


Allen, Scholefield (Crewe)
Ewart, R.
Kinley, J.


Anderson, Alexander (Motherwell)
Fernyhough, E.
Kirkwood, Rt. Hon. D.


Anderson, Frank (Whitehaven)
Field, Capt. W. J.
Lang, Gordon


Awbery, S. S.
Finch, H. J.
Lee, Frederick (Newton)


Ayles, W. H.
Fletcher, Eric (Islington, E.)
Lee, Miss Jennie (Cannock)


Bacon, Miss Alice
Follick, M.
Lever, Harold (Cheetham)


Baird, J.
Foot, M. M.
Lever, Leslie (Ardwick)


Balfour, A.
Forman, J. C.
Lewis, Arthur (West Ham, N.)


Barnes, Rt. Hon. A. J.
Fraser, Thomas (Hamilton)
Lewis, John (Bolton, W.)


Bartley, P.
Freeman, John (Watford)
Lindgren, G. S.


Bellenger, Rt. Hon. F. J.
Freeman, Peter (Newport)
Lipton, Lt.-Col. M.


Benn, Wedgwood
Gaitskell, Rt. Hon. H. T. N.
Logan, D. G.


Benson, G.
Ganley, Mrs. C. S.
Longden, Fred (Small Heath)


Beswick, F.
George, Lady Megan Lloyd
McAllister, G.


Bevan, Rt. Hon. A. (Ebbw Vale)
Gibson, C. W.
MacColl, J. E.


Bing, G. H. C.
Gilzean, A.
Macdonald, A. J. F. (Roxburgh)


Blenkinsop, A.
Glanville, James (Consett)
McGhee, H. G.


Blyton, W. R.
Gooch, E. G.
McGovern, J.


Boardman, H.
Gordon-Walker, Rt. Hon. P. C.
McInnes, J.


Booth, A.
Granville, Edgar (Eye)
Mack, J. D.


Bottomley, A. G.
Greenwood, Anthony (Rossendale)
McKay, John (Wallsend)


Bowles, F. G. (Nuneaton)
Greenwood, Rt. Hn. Arthur (Wakefield)
Mackay, R. W. G. (Reading, N.)


Braddock, Mrs Elizabeth
Grenfell, D. R.
McLeavy, F.


Brook, Dryden (Halifax)
Grey, C. F.
MacMillan, Malcolm (Western Isles)


Brooks, T. J. (Normanton)
Griffiths, David (Rother Valley)
McNeil, Rt. Hon. H.


Broughton, Dr. A. D. D.
Griffiths, Rt. Hon. James (Llanelly)
MacPherson, Malcolm (Stirling)


Brown, Rt. Hon. George (Belper)
Griffiths, William (Exchange)
Mainwaring, W. H.


Brown, Thomas (Ince)
Gunter, R. J.
Mallalieu, E. L. (Brigg)


Burke, W. A.
Hale, Joseph (Rochdale)
Mallalieu, J. P. W. (Huddersfield, E.)


Burton, Miss E.
Hale, Leslie (Oldham, W.)
Mann, Mrs. Jean


Butler, Herbert (Hackney, S.)
Hall, John (Gateshead, W.)
Manuel, A. C.


Callaghan, L. J.
Hall, Rt. Hon. Glenvil (Colne Valley)
Marquand, Rt. Hon. H. A.


Carmichael, J.
Hamilton, W. W.
Mathers, Rt. Hon. G.


Castle, Mrs. B. A.
Hannan, W.
Mollish, R. J.


Champion, A. J.
Hardman, D. R.
Messer, F.


Chetwynd, G. R.
Hardy, E. A.
Middleton, Mrs. L.


Clunie, J.
Hargreaves, A.
Mikardo, Ian.


Cocks, F. S.
Harrison, J.
Mitchison, G. R.


Coldrick, W.
Hastings, S.
Moeran, E. W.


Collindridge, F.
Hayman, F. H.
Monslow, W.


Cook T. F.
Henderson, Rt. Hon Arthur (Tipton)
Moody, A. S.


Cooper, Geoffrey (Middlesbrough, W.)
Herbison, Miss. M.
Morgan, Dr. H. B.


Cooper, John (Deptford)
Hewitson, Capt. M.
Morley, R.


Cove, W. G.
Hobson, C. R.
Morris, Percy (Swansea, W.)


Craddock, George (Bradford, S.)
Holman, P.
Mort, D. L.


Crawley, A.
Holmes, Horace (Hemsworth)
Moyle, A.


Crosland, C. A. R.
Houghton, D.
Mulley, F. W.


Crossman, R. H. S.
Hoy, J.
Murray, J. D.


Cullen, Mrs. A.
Hubbard, T.
Nally, W.


Daines, P.
Hudson, James (Ealing, N.)
Neal, Harold (Bolsover)


Dalton, Rt. Hon. H.
Hughes, Emrys (S. Ayrshire)
Noel-Baker, Rt. Hon. P. J.


Darling, George (Hillsborough)
Hughes, Hector (Aberdeen, N.)
O'Brien, T.


Davies, A. Edward (Stoke, N.)
Hughes, Moelwyn (Islington, N.)
Oldfield, W. H.


Davies, Rt. Hon. C. (Montgomery)
Hynd, H. (Accrington)
Oliver, G. H.


Davies, Ernest (Enfield, E.)
Hynd, J. B. (Attercliffe)
Orbach, M.


Davies, Harold (Leek)
Irvine, A. J. (Edge Hill)
Padley, W. E.


Davies, Stephen (Merthyr)
Irving, W. J. (Wood Green)
Paget, R. T.


de Freitas, Geoffrey
Isaacs, Rt. Hon. G. A.
Paling, Rt. Hon. W. (Dearne Valley)


Deer, G.
Janner, B.
Paling, Will T. (Dewsbury)


Delargy, H. J.
Jay, D. P. T.
Pannell, T. C.


Diamond, J.
Jeger, George (Goole)
Pargiter, G. A.


Dodds, N. N.
Jeger, Dr. Santo (St. Pancras, S.)
Parker, J.


Donnelly, D.
Jenkins, R. H.
Paton, J.


Driberg, T. E. N.
Johnson, James (Rugby)
Pearson, A.


Dugdale, Rt. Hon. John (W. Bromwich)
Johnston, Douglas (Paisley)
Peart, T. F.


Dye, S.
Jones, David (Hartlepool)
Poole, C.


Ede, Rt. Hon. J. C.
Jones, Frederick Elwyn (W. Ham, S.)
Popplewell, E.


Edelman, M.
Jones, Jack (Rotherham)
Porter, G.


Edwards, John (Brighouse)
Jones, William Elwyn (Conway)
Price, Philips (Gloucestershire, W.)


Edwards, Rt. Hon. Ness (Caerphilly)
Keenan, W.
Proctor. W. T.




Pryde, D. J.
Steele, T.
Wheatley, Rt. Hon. John (Edinb'gh E.)


Pursey, Cmdr. H.
Stewart, Michael (Fulham, E.)
White, Mrs. Eirene (E. Flint)


Rankin, J.
Stokes, Rt. Hon. R. R.
White, Henry (Derbyshire, N.E.)


Rees, Mrs. D.
Strachey, Rt. Hon. J.
Whiteley, Rt. Hon. W.


Reeves, J.
Strauss, Rt. Hon. George (Vauxhall)
Wigg, G.


Reid, Thomas (Swindon)
Stress, Dr. Barnett
Wilcock, Group Capt. C. A. B.


Reid, William (Camlachie)
Summerskill, Rt. Hon. Edith
Wilkes, L.


Rhodes, H.
Sylvester, G. O.
Wilkins, W. A.


Richards, R.
Taylor, Bernard (Mansfield)
Willey, Frederick (Sunderland)


Robens, Rt. Hon. A.
Taylor, Robert (Morpeth)
Willey, Octavius (Cleveland)


Roberts, Emrys (Mericneth)
Thomas, David (Aberdare)
Williams, David (Neath)


Roberts, Goronwy (Caernarvonshire)
Thomas, George (Cardiff)
Williams, Rev. Llywelyn (Abertillery)


Robertson, J. J. (Berwick)
Thomas, Iorwerth (Rhondda, W.)
Williams, Ronald (Wigan)


Rogers, George (Kensington, N.)
Thomas, Ivor Owen (Wrekin)
Williams, Rt. Hon. Thomas (Don V'lly)


Ross, William
Thorneycroft, Harry (Clayton)
Williams, W. T. (Hammersmith, S.)


Royle, C.
Thurtle, Ernest
Wilson, Rt. Hon. Harold (Huyton)


Shawcross, Rt. Hon. Sir Hartley
Timmons, J.
Winterbottom, Ian (Nottingham, C.)


Shinwell, Rt. Hon. E.
Tomney, F.
Winterbottom, Richard (Brightside)


Shurmer, P. L. E.
Turner-Samuels, M.
Wise, F. J.


Silverman, Julius (Erdington)
Ungoed-Thomas, Sir. Lynn
Woodburn, Rt. Hon. A.


Silverman, Sydney (Nelson)
Usborne, H.
Woods, Rev. G. S.


Simmons, C. J.
Vernon, W. F.
Wyatt, W. L.


Slater, J.
Viant, S. P.
Yates, V. F.


Smith, Ellis (Stoke, S.)
Wallace, H. W.
Younger, Hon. K.


Smith, Norman (Nottingham, S.)
Watkins, T. E.



Snow, J. W.
Webb, Rt. Hon. M. (Bradford, C.)
TELLERS FOR THE AYES:


Sorensen, R. W.
Weitzman, D.
Mr. Bowden and


Soskice, Rt. Hon. Sir Frank
Wells, William (Walsall)
Mr. Kenneth Robinson


Sparks, J. A.
West, D. G.





NOES


Aitken, W. T.
Crosthwaite-Eyre, Col. O. E.
Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert


Alport, C. J. M.
Crouch, R. F.
Heald, Lionel


Amery, Julian (Preston, N.)
Crowder, Capt. John (Finchley)
Heath, Edward


Amory, Heathcoat (Tiverton)
Crowder, Petre (Ruislip—Northwood)
Henderson, John (Cathcart)


Arbuthnot, John
Gundiff, F. W.
Hicks-Beach, Maj. W. W.


Ashton, H. (Chelmsford)
Cuthbert, W. N.
Higgs, J. M. C.


Assheton, Rt. Hon. R. (Blackburn, W.)
Darling, Sir William (Edinburgh, S.)
Hill, Dr. Charles (Luton)


Astor, Hon. M. L.
Davidson, Viscountess
Hill, Mrs. E. (Wytheushawe)


Baker, P. A. D.
Davies, Nigel (Epping)
Hinchingbrooke, Viscount


Baldock, Lt.-Cmdr. J. M.
de Chair, Somerset
Hirst, Geoffrey


Baldwin, A. E.
De la Bère, R.
Hollis, M. C.


Banks, Col. C.
Deedes, W. F.
Holmes, Sir Stanley (Harwich)


Baxter, A. B.
Digby, S. Wingfield
Hope, Lord John


Beamish, Maj. Tufton
Dodds-Parker, A. D.
Hopkinson, H. L. D' A.


Bell, R. M.
Donner, P. W.
Hornsby-Smith, Miss P.


Bennett, Sir Peter (Edgbaston)
Douglas-Hamilton, Lord Malcolm
Horsbrugh, Rt. Hon. Florence


Bennett, Dr. Reginald (Gosport)
Drayson, G. B.
Howard, Gerald (Cambridgeshire)


Bennett, William (Woodside)
Dugdale, Maj. Sir Thomas (Richmond)
Howard, Greville (St. Ives)


Bevins, J. R. (Liverpool, Toxteth)
Duncan, Capt. J. A. L.
Hudson, Sir Austin (Lewisham, N.)


Birch, Nigel
Dunglass, Lord
Hudson, Rt. Hon. Robert (Southport)


Bishop, F. P.
Duthie, W. S.
Hudson, W. R. A. (Hull, N.)


Black, C. W.
Eccles, D. M.
Hutchinson, Geoffrey (Ilford, N.)


Boles, Lt.-Col. D. C. (Wells)
Eden, Rt. Hon. A.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)


Bessom, A. C.
Elliot, Rt. Hon. W. E.
Hutchison, Col. James (Glasgow)


Boyd-Carpenter, J. A.
Erroll, F. J.
Hyde, Lt.-Col. H. M.


Boyle, Sir Edward
Fisher, Nigel
Hylton-Foster, H. B.


Bracken, Rt. Hon B.
Fletcher, Walter (Bury)
Jeffreys, General Sir George


Braine, B. R.
Fort, R.
Jennings, R.


Braithwaite, Sir Albert (Harrow, W.)
Foster, John
Johnson, Howard (Kemptown)


Braithwaite, Lt.-Cr. G. (Bristol, N. W.)
Frater, Hon. Hugh (Stone)
Jones, A. (Hall Green)


Bromley-Davenport, Lt.-Col. W.
Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Joynton-Hicks, Hon L. W.


Browne, Jack (Govan)
Fyfe, Rt. Hon. Sir David Maxwell
Kaberry, D.


Buchan-Hepburn, P. G. T.
Gage, C. H.
Kerr, H. W. (Cambridge)


Bullock, Capt. M.
Galbraith, Cmdr. T. D. (Pollok)
Kingsmill, Lt.-Col. W. H.


Bullus, Wing Commander, E. E.
Galbraith, T. G. D. (Hillhead)
Lambert, Hon. G.


Burden, F. A.
Gammans, L. D.
Lancaster, Col. C. G.


Butcher, H. W.
Garner-Evans, E. H. (Denbigh)
Langford-Holt, J.


Butler, Rt. Hn. R. A. (Saffron Walden)
Gates, Maj. E. E.
Law, Rt. Hon. R. K.


Carr, Robert (Mitcham)
Glyn, Sir Ralph
Leather, E. H. C.


Carton, Hon. E.
Gomme-Duncan, Col. A.
Legge-Bourke, Maj. E. A. H.


Channon, H.
Gridley, Sir Arnold
Lennox-Boyd, A. T.


Clarke, Col. Ralph (East Grinstead)
Grimston, Hon. John (St. Albans)
Lindsay, Martin


Clarke, Brig. Terence (Portsmouth, W.)
Grimston, Robert (Westbury)
Linstead, H. N.


Clyde, J. L.
Harden, J. R. E.
Llewellyn, D.


Colegate, A.
Hare, Hon. J. H. (Woodbridge)
Lloyd, Rt. Hn. Geoffrey (King's N'rt'n)


Conant, Maj. R. J. E.
Harris, Frederic (Croydon, N.)
Lloyd, Maj. Guy (Renfrew, E.)


Cooper, Sqn. Ldr. Albert (Ilford, S.)
Harris, Reader (Heston)
Lloyd, Selwyn (Wirral)


Cooper-Key, E. M.
Harvey, Air Cdre. A. V. (Macclesfield)
Lockwood, Lt.-Col. J. C.


Corbett, Lt.-Col. Uvedale (Ludlow)
Harvey, Ian (Harrow, E.)
Longden, Gilbert (Herts, S. W.)


Craddock, Beresford (Spelthone)
Harvie-Watt, Sir George
Low, A. R. W.


Cranborne, Viscount
Hay, John
Lucas, Sir Jocelyn (Portsmouth, S.)


Crookshank, Capt. Rt. Hon. H. F. C.
Head, Brig. A. H.
Lucas, P. B. (Brentford)







Lucas-Tooth, Sir Hugh
Orr-Ewing, Charles Ian (Hendon, N.)
Stoddart-Scott, Col. M.


Lyttelton, Rt. Hon. O.
Orr-Ewing, Ian L. (Weston-super-Mare)
Storey, S.


McAdden, S. J.
Osborne, C.
Strauss, Henry (Norwich, S.)


McCallum, Major D.
Peake, Rt. Hon. O.
Stuart, Rt. Hon. James (Moray)


McCorquodale, Rt. Hon. M. S.
Perkins, W. R. D.
Summers, G. S.


Macdonald, Sir Peter (I. of Wight)
Peto, Brig. C. H. M.
Sutcliffe, H.


Mackeson, Brig. H. R.
Pickthorn, K.
Taylor, Charles (Eastbourne)


McKibbin, A.
Pitman, I. J.
Taylor, William (Bradford, N.)


HcKie, J. H. (Galloway)
Powell, J. Enoch
Teeling, W.


Maclay, Hon. John
Prescott, S.
Teevan, T. L.


Maclean, Fitzroy
Price, Henry (Lewisham, W.)
Thomas, J. P. L. (Hereford)


MacLeod, Iain (Enfield, W.)
Prior-Palmer, Brig. O.
Thompson, Lt.-Cmdr. R. (Croydon, W.)


MacLeod, John (Ross and Cromarty)
Profumo, J. D.
Thorneycroft, Peter (Monmouth)


Macmillan, Rt. Hon. Harold (Bromley)
Raikes, H. V.
Thornton-Kemsley, Col. C. N.


Macpherson, Major Niall (Dumfries)
Rayner, Brig. R.
Thorp, Brig. R. A. F.


Mainland, Cmdr. J. W.
Redmayne, M.
Tilney, John


Manningham-Buller, R. E.
Remnant, Hon. P.
Touche, G. C.


Marlowe, A. A. H.
Renton, D. L. M.
Turner, H. F. L.


Marples, A. E.
Roberts, Maj. Peter (Heeley)
Turton, R. H.


Marshall, Douglas (Bodmin)
Robertson, Sir David (Caithness)
Tweedsmuir, Lady


Marshall, Sidney (Sutton)
Robinson, Roland (Blackpool, S.)
Vane, W. M. F.


Maude, Angus (Ealing S.)
Robson-Brown, W.
Vaughan-Morgan, J. K.


Maude, John (Exeter)
Rodgers, John (Sevenoaks)
Vosper, D. F.


Maudling, R.
Roper, Sir Harold
Wakefield, Edward (Derbyshire, W.)


Medlicott, Brig. F.
Ropner, Col. L.
Wakefield, Sir Wavell (Marylebone)


Mellor, Sir John
Russell, R. S.
Walker-Smith, D. C.


Molson, A. H. E.
Ryder, Capt. R. E. D.
Ward, Hon. George (Worcester)


Monckton, Sir Walter
Salter, Rt. Hon. Sir Arthur
Ward, Miss I. (Tynemouth)


Moore, Lt.-Col. Sir Thomas
Sandys, Rt. Hon. D.
Waterhouse, Capt. Rt. Hon. C.


Morris, Hopkin (Carmarthen)
Savory, Prof. D. L.
Watkinson, H.


Morrison, John (Salisbury)
Scott, Donald
Webbe, Sir H. (London &amp; Westminster)


Morrison, Rt. Hon. W. S. (Cirencester)
Shepherd, William
White, Baker (Canterbury)


Mott-Radclyffe, C. E.
Smiles, Lt.-Col. Sir Walter
Williams, Charles (Torquay)


Nabarro, G.
Smithers, Peter (Winchester)
Williams, Gerald (Tonbridge)


Nicholls, Harmar
Smithers, Sir Waldron (Orpington)
Williams, Sir Herbert (Croydon, E.)


Nicholson, G.
Smyth, Brig. J. G. (Norwood)
Wills, G.


Nield, Basil (Chester)
Snadden, W. McN.
Wilson, Geoffrey (Truro)


Noble, Cmdr. A. H. P.
Soames, Capt. C.
Winterton, Rt. Hon Earl


Nugent, G. R. H.
Spearman, A. C. M.
Wood, Hon. R.


Nutting, Anthony
Spence, H. R. (Aberdeenshire, W.)
York, C.


Oakshott, H. D.
Spens, Sir Patrick (Kensington, S.)



Odey, G. W.
Stanley, Capt. Hon. Richard (N. Fylde)
TELLERS FOR THE NOES:


O'Neill, Rt. Hon. Sir Hugh
Stevens, G. P.
Mr. Studholme and


Ormsby-Gore, Hon. W. D.
Steward, W. A. (Woolwich, W.)
Major Wheatley.


Orr, Capt. L. P. S.
Stewart, Henderson (Fife, E.)



Question put, and agreed to.

Clause 2.—(ENTERTAINMENTS DUTY.)

The Chairman: The first three Amendments in page 2, to lines 25, 26 and 30, are out of order. In regard to the last Amendment, in page 2, line 35, at the end, to add a new subsection, I have advised the hon. and gallant Member for North Fylde (Captain Stanley) that it would be more appropriate as a new Clause. I have received a manuscript Amendment, which I propose to call. Mr. Charles Williams.

Mr. Charles Williams: I beg to move, as a manuscript Amendment, in page 2, line 33, to leave out "August," and to substitute "October."
I thank you, Major Milner, for calling this manuscript Amendment. I regret that it was not on the Order Paper. Through certain circumstances, I thought it advisable that we should have a discussion here on the comparatively narrow point as to whether August or October was the right time to begin this form of duty. I have a very strong case for thinking that

October would be by far the better time. I feel that the Treasury may not have been into the matter and may not have had any conferences, although I hope that on these matters the Chancellor himself may be holding personal conferences.
I represent a great seaside resort. From the point of view of seaside resorts it is obvious that a great change of this kind in the middle of the holiday season must be very difficult and very bad. For that reason I would prefer the change to occur in October. This affects not only Torbay but a vast number of other areas including Falmouth, Scarborough, and particularly Scotland. I put the date rather later than I might otherwise have done, because I considered places in the North country as well. This will include some seaside resorts not so very far from your own constituency, Major Milner. I felt bound to represent them in this Committee because, after all, I represent the most important of all the seaside places. [HON. MEMBERS: "Oh."] I am glad to find that is so widely admitted.
There is another point which ought to be considered. We should also have regard to the winter seasons for cinemas and other entertainments of that kind. I know that we have to choose some date, but I should have thought that from the point of view of programmes of that sort October would be a far better time for this than August. [Interruption.] I am doing something for hon. Members opposite. If I can get this extension they can go back to their industrial areas and say, "Thank goodness! We have been able to get this extension through the hon. Member for Torquay." I should imagine that they will support me on this occasion. It is very rare that I appear to have such wholehearted support from hon. Members opposite.
I put down the Amendment because I consider the August date to be a thoroughly bad one. It has never been explained why this should begin in August. I hope the Treasury will tell us why August has been chosen. Is there any reason for it, or has the Chancellor taken a blind dash at it and put in August because it has appeared in some other Bill? If it has appeared in another Bill, I realise that this hide-bound Government must always follow precedents especially if they are bad ones. We are entitled to know why the date was chosen. I hope the Government will tell us whether they have taken the least trouble to find out if this is the most inconvenient or the most convenient date for the change. I believe it to be one of the worst dates.
I see that the noble Lord the Member for Horsham (Earl Winterton) is taking an interest in this matter. He has much more knowledge about this subject than I have. Some of my hon. Friends have a much greater detailed knowledge of the cinema industry than I have, though not so much knowledge of its effect on the ordinary people of the country and particularly the poorer people. The Government have not made many concessions today, but I ask them to make this one because it will entitle them to claim that, at any rate, they have met one of the most reasonable Amendments ever proposed in the House of Commons.

Mr. Jay: I listened carefully to the hon. Member for Torquay (Mr. C. Williams), but he has not convinced me that there is any good case for postpon-

ing this tax increase until October. The reason why we have included the date of August in the Bill is simply that it is the earliest date at which the tax can come into force after the passing of this Bill into law. If we were to postpone application for two months, we would lose £1¼ million of revenue, which is a not altogether trifling sum even in this Budget. Incidentally, there would be a loss of revenue to British film production owing to the working of the levy of which the hon. Gentleman knows.
I cannot think that the application of this duty—which is, after all, without going into the main issue, only an increase of 2d. on the admission prices—will have so severe an effect as to cause serious damage to the enjoyment which people will be having in the very agreeable and thriving constituency of the hon. Gentleman.

Lieut.-Commander Braithwaite: There is one administrative point on which I would like elucidation. The Financial Secretary has just told the Committee that 5th August was the first convenient date or the first possible date when this could come into operation.

Mr. Glenvil Hall: Following the passing of the Bill.

Lieut.-Commander Braithwaite: I am glad to be reinforced by the right hon. Gentleman the late Financial Secretary, whose absence from the Treasury Bench we deplore on this occasion. Why choose the Sunday which falls in the middle of Bank Holiday week-end as the moment for this to come into operation? Surely it will cause difficulty, not only in the constituency of my hon. Friend the Member for Torquay (Mr. C. Williams) important as that is, but in any seaside or holiday resort where the visitors on the Saturday pay one price at the box office and find themselves on the Sunday which falls right in the middle of the holiday week-end suddenly confronted with this increased charge. Will it not also be difficult—does the hon. Gentleman the Member for Leicester, North-West (Mr. Janner), wish to intervene?

Mr. Janner: I would only point out to the hon. and gallant Gentleman that if they go on the Saturday, they are not likely to go on the Sunday as well.

Lieut.-Commander Braithwaite: That is indeed a poor tribute to the increased standard of living of the workers so often rejoiced in by the benches opposite. However, as the hon. Gentleman is quite a recent convert from Liberalism, he has evidently not been adequately briefed on this occasion. Is it not the case that this is a rather inconvenient administrative arrangement, not only for those who go to see the films, but also for the box offices and for the staff of the cinemas, not only in this area but in many others? Whatever the merits of October may be, and despite the fact that, as the hon. Gentleman has told us, he would sacrifice £1¼ million if he waited for another three months, why has the Sabbath Day been chosen for this particular profanation?

Mr. O'Brien: Would it not be better, Major Milner, for the Committee to be advised that this point should be considered on the Third Reading? It is not for us to bury the body before the body is a corpse.

Mr. C. Williams: May I ask the Financial Secretary a question? He said that the postponement would involve a sacrifice of revenue, but I ask him to look at the matter from this point of view. He is introducing the increase in the middle of the August Bank Holiday. Would he be prepared to make a slight concession and to defer it until, say, September?

8.30 p.m.

Mr. Howard Johnson: I support my hon. Friend the Member for Torquay (Mr. C. Williams) in his plea for the postponement of the increase in the tax until October. The Financial Secretary to the Treasury referred to Torquay as being a very thriving and prosperous holiday resort, but it is important to remember that all holiday resorts today are not so thriving and prosperous.
I therefore make a very short appeal to the Government. With one stroke they could do two things. They could, even in a country where the cost of living is ever rising, let the workers have an August holiday without having to pay an increased admission price to cinemas. By the same stroke they could help the holiday industry by keeping cinema prices at their present high level, without making that level even worse than it is, until the end of the holiday season. The postponement of the date from August until

October would therefore, at one stroke, have two very beneficial effects, and I ask the Government to agree to do at least that.

Colonel Crosthwaite-Eyre: I should not have spoken unless the Financial Secretary himself had brought the question of cinemas into the Amendment. The hon. Gentleman will realise that under the existing Eady plan the Government gave an undertaking for a year, to end in September of this year, about prices. They have broken that promise in the Budget. I should have thought it would have been a very generous and, indeed, an equitable thing to have accepted the Amendment, so that no matter what might be the result of our later discussions, at least they should not start with a challenge of bad faith to the Government for having broken a promise.
I remind the Financial Secretary particularly about the promise he gave on the cheaper seats. He said that there would be no increase of tax on seats of 6d.; that was an integral and vital part of the Eady Plan. Under the Budget, however, he has levied a penny tax. If he were to make a postponement until October, we should in a short time be able to argue all the merits of whether the tax is right and so on, and at least the Financial Secretary would not stand charged, as he does now, with having broken an undertaking which the Treasury had given. For those reasons, if for no other, I hope that the hon. Gentleman will accept the Amendment in order to show that the Treasury enter into their agreements in good faith and not in bad faith.

Mr. R. S. Hudson: I hope that the Financial Secretary will find it possible to deal with the argument which has been adduced from this side, because I gather that one, at any rate, of the causes for a certain amount of ill feeling in the cinema industry is their belief that when the four associations agreed to the Eady Plan, although the Government were not a party to it they nevertheless embodied the change in legislation. Certainly the four associations who negotiated the Eady Plan were under the genuine and quite reasonable assumption that when the tax alteration was made, it should stand for the 12 months from September, 1950, to September, 1951.
I cannot say from personal knowledge whether that is well founded, but certainly we on this side have received representations on this point, although it is not a very large one. If the Financial Secretary could see his way to adopting the suggestion of the postponement until October, he would, I think, obviate one of the causes of irritation under which the cinema industry are quite genuinely labouring.

Mr. Jay: I am asked first why we selected the date of Sunday, 5th August. There is nothing sinister in that; we wish the tax to come into force on the first possible date after the Bill has become law, and if hon. Members look at their diaries they will see that 5th August, the Sunday of the Bank Holiday weekend, is that date. According to the best information at our disposal, that would be the first date after which the Bill would become law.
The hon. and gallant Member for the New Forest (Colonel Crosthwaite-Eyre) raised a new point—to the effect that the enforcement of the change in duty in August might be a breach of the pledge given a year ago—

Mr. Hudson: An understanding.

Mr. Jay: An understanding. I understood that the intention was that the Eady Plan should run for one year, and therefore it was naturally liable to revision in this Bill. If, however, it can be shown that any binding undertaking was given by the Government which would be broken by the enforcement of this increase on 5th August, certainly I will investigate that before the Report stage to see whether we should make any adjustment, as, clearly, if we gave a binding undertaking we must adhere to it.

Mr. Hudson: I am much obliged to the hon. Gentleman. He will see if he looks at HANSARD tomorrow that I was particularly careful to avoid saying that the Government had given a binding undertaking. What I said was that the Government were parties to the discussion which resulted in the Eady Plan and the four associations were left definitely under the impression, as the hon. Gentleman himself said, that this scheme would run for a year. It was brought in in September and clearly, on his own definition, it has not run for a year if it is brought to an

end in August, at the end of 11 months. I feel that there is a point that needs looking into, and I think that the hon. Gentleman will realise that it is a pity to leave people with a sense of having been done down. This would not make a great deal of difference, but it would ease the way for further negotiations. I hope that it will be carried out.

Earl Winterton: I did not actually take part in the discussions on the Eady Plan, but I was very privy to them, if one may use such a clumsy term. Quite obviously, if a distinguished representative of the Treasury, acting on behalf of the Chancellor of the Exchequer, acts on a matter of this kind where a big question of taxation is concerned—and no official of the Treasury could act without the full cognisance of his chief—and if at that final meeting there was an understanding on both sides that the tax should run for a year, I submit through you, Major Milner, to the Committee, that that was binding on the Government, if there was an undertaking by both sides agreed to at that meeting.
I am glad that the hon. Gentleman has decided to look into it. I should like him to go so far as to say that he agrees with the construction I have put on the matter, that if there is discussion between a high official of the Treasury and an industry on a matter concerning a considerable sum of taxation and there is agreement at the end that a certain process shall run for a year, that is binding on the Government.

Mr C. Williams: I am not sure where we actually stand on this matter now, but I realise there has been a certain move towards my direction, thanks to the intervention of my hon. and gallant Friend the Member for the New Forest (Colonel Crosthwaite-Eyre). The Financial Secretary to the Treasury has said that the reason he cannot accept my Amendment is because this is the earliest date on which the taxation can be imposed. In other words, the whole question is how quickly can the burden be put on and not how convenient it is to the general public. The choice of the hon. Gentleman has been such that he thinks that the right day is the Sunday in the middle of the August Bank Holiday.
I have heard of Christmas presents and New Year presents and all sorts of other


presents, but I have never heard of anyone like this Government, who say, and I hope it will be widely known, that the best way of celebrating Bank Holiday is deliberately to throw this burden on the poorest people of this country. That is an astonishing thing for a Government which is always using the word "labour." It is a shocking thing. I deliberately gave the Government a way of getting out of the situation. They could have accepted my Amendment of "September." It is obvious, since they have not done so, that they have chosen the date deliberately to inflict this burden at the worst possible time. But having made my position clear, and having shown up the Government, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. R. S. Hudson: We had, at the beginning of today's Sitting, a discussion with you, Major Milner, as to the way the debate was to be conducted. We realise that we cannot challenge your Ruling, but I hope you will not think it rude of me if for purposes of record I register our emphatic protest against a Ruling that no Amendment shall be called on this Clause, as was the case on the first Clause.

The Chairman: If I understand the right hon. Gentleman correctly, he is registering a protest against no Amendment being called. The reason, as I made clear, is that all three Amendments are clearly out of order. That being so, I have no alternative but to rule them out of order.

Mr. Hudson: I understood you to say earlier today, Major Milner, that what applied to Clause I applied to Clause 2.

The Chairman: In relation to the first Amendment only, which, like the first Amendment on Clause 1, is out of order, and for the same reasons. But equally the Amendments or the effective Amendment of the hon. and gallant Member for the New Forest (Colonel Crosthwaite-Eyre) is also out of order for other reasons. Further, I have suggested, and it has been agreed that the last Amendment, in the name of the hon. and gallant

Member for North Fylde (Captain Stanley), should be put down as a new Clause. Accordingly, I hope that the right hon. Gentleman will not feel that I have taken any steps on this Clause which justify a protest.

Mr. Hudson: I did not appreciate that Major Milner. I thought that what you said about Clause I applied equally to Clause 2.
As we are now speaking on the Motion "That the Clause stand part of the Bill," the bulk of the observations which I have to offer to the Committee deal with the question of the application of the increased Entertainments Duty to the cinema industry. It will be admitted on all sides of the Committee that we are dealing here with an industry that is definitely sick. It has for many years past been the subject of a great deal of consideration by successive Governments, not only the Conservative Government before the war but also by the Government during the war and the Government since the war. Also, we have had the advantage quite recently of reading the recommendations of the Plant Committee. Equally, the Government, not very long ago, set up the National Film Finance Corporation to try to help to maintain the productive side of the industry; and we have had also the advantage of reading the recent report by the late chairman of the Film Finance Corporation, to which I shall refer later.
8.45 p.m.
Hitherto in this industry the main concern of the country has been with the British film producers. Now it is not only the film producers who evidently are in difficulties, but also the exhibitors, the distributors of films and the owners of cinemas up and down the country. In his Budget speech the Chancellor said that the tax on cinemas had not been increased for eight years. That may very well be true, but the difference, as I see it, between the cinema industry and other productive industries who superficially anyway during the last few years have benefited from inflation, is that the cinema industry after the temporary post-war boomlet, is now suffering increasingly and progressively from the pressure on the cinema-going public of the steadily rising cost of living.
I do not think that the Government will deny that, because they themselves have produced figures of tax receipts showing, for example, that in 1946 tax receipts were £41,430,000 and in successive years since then have steadily fallen until in the year ending March, 1951, receipts had dropped to £36,430,000—a drop over the five years of £5 million. Every million reduction in tax receipts involves a reduction in the gross box office takings of some £2,700,000.
As regards the effect on exhibitors, we have had before us and I imagine all hon. Members have a copy of it, a document giving a summary of a sample inquiry made, I gather, at the request of the Treasury, into the returns from five different groups of cinemas in the country whose takings range from £7,500 a year to over £20,000. So far as I know, the broad accuracy of those figures has not been challenged, and therefore I think we can legitimately draw a certain number of conclusions from their study.
If hon. Members will refer to the second and third classes they will find that although all the classes of cinemas have shown a steadily decreasing net taking figure, two of the classes have this year shown an actual loss. Hon. Members will also see that the sums allowed for depreciation in each of the years and in each of the groups of cinemas are obviously totally insufficient to keep their halls, their seats, their projection apparatus, lavatories, amenities, and so forth, up to the standard that the daily use of a cinema obviously requires. I do not wish to weary the Committee with figures but if we take the fifth group of 39 cinemas with gross takings of between £15,000 and £20,000 per year, we see that the amount allowed for depreciation in the whole group was only £6,975; which, if my arithmetic is correct, means an average figure on depreciation of £175 per year.
I do not think anyone can believe that a figure as small as that is really adequate to maintain cinemas at the standard, both of safety and of comfort that the public can legitimately demand, quite apart from providing adequate sums, for example, for the new Home Office requirement of complete rewiring over the next three years to comply with the revised safety regulations.
While gross and net takings have been steadily falling the admission prices of cinemas have been strictly controlled. I submit to the Government that, in this respect again, there is a substantial difference between the cinema industry and other industries which are subject to price control. In the majority of other industries, where it can be shown that there has been a substantial increase in costs of, say, distribution the Board of Trade or the Ministry of Food, as the case may be, after making the necessary costing investigations, have agreed, on the whole, to reasonable increases in prices and very often to reasonable increases in margins. Indeed, that is the basis of the innumerable orders which have been submitted to the House of Commons and which, occasionally, have been the subject of a certain amount of controversy recently between the two sides.
In the case of the cinema industry alone, that has never been so. This industry, which is very strictly price controlled as far as the cost of admission is concerned, is now faced with the new additional burden of helping to find for the Chancellor an additional £10 million a year. It is true that the Chancellor professes to forgo, for the benefit of the industry, a sum of ½d. per admission through an arrangement of the same kind as the so-called Eady plan of last year. The proceeds of that plan, however, were devoted not to the exhibitors but to the producers and the makers of British films.
Sir Michael Balcon, who is the well-known honorary adviser to the British Film Corporation, has gone on record as saying that the Eady plan will make a difference but will not close the gap between the costs of production and the proceeds of renting the films. The recently published Report of the Film Finance Corporation bears this out. In that Report there is a statement by the chairman to the effect that the Corporation have not succeeded in closing the gap, and that the money provided by the House of Commons is running out. I have no doubt that in the comparatively near future the Government will ask for further funds to keep the productive side of the industry in operation.
The Film Finance Corporation also say frankly that although they have sponsored a number of films which have proved successful, nevertheless the profits


made by these successful films are not sufficient to make good the losses incurred by the unsuccessful films. Therefore, we are faced with an industry on which both sides—the producers and, for want of a better word, the distributors or exhibitors—are doing badly. Again I draw the contrast between this industry where both sides are doing badly, and other productive industries who have been making substantial profits even though those profits may have been in terms of the steadily depreciated pounds that we now enjoy.
I do not think that it is denied that the costs of this industry are steadily rising. I think that hon. Members have been given details of the increased costs of furniture, projection equipment, and so forth, and I need not bother further about that. They are also faced with increased demands for wages, and I am bound to say, from what I have been able to ascertain of the rates of wages, that they seem to me to be very understandable demands, which are made to enable the recipients of these wages to meet the steadily rising cost of living.
Therefore, we have this industry faced with these new demands, among them a demand by the Chancellor of the Exchequer for a substantial new contribution in the way of Entertainments Duty. In his Budget speech, the Chancellor said airily that it was usual for the trades concerned to criticise any taxes which they collected for the Exchequer. No doubt that is true, but the Chancellor very conveniently ignored—I am not blaming him, because I might even have been tempted myself if I had been in his place—the fact that a committee appointed by the late President of the Board of Trade had, after very careful and full investigation, reported as recently as November, 1949, that the Entertainments Duty at the then existing rates was too great a burden on the industry. If, at the then existing rates, it was too great a burden on the industry, how much truer will that be of the new duty at the higher rate?
If the Committee will allow me, I would like to quote one short extract from the Plant Committee's Report. They were referring to the Entertainments Duty, and, on page 28. in paragraph 66, they said this:

As we have already indicated, we are satisfied from our study of the relation between the revenue and the operating costs of the cinematograph industry that the Government should now bring urgently under review the whole question of the burden of Entertainments Duty which the industry can sustain if it is to operate"—
and these are valid words—
in the future on the scale which the Government would wish to see maintained.
It is not only the Government but both sides of this Committee which would wish to see it maintained. The Report goes on:
Such a review should include a re-assessment, in close consultation with the trade, of the rates of duty to be levied on each price of admission. We are advised that discussions of Entertainments Duty with the trade have hitherto proceeded on the express understanding that the Government did not wish prices of admission to be increased except for very good reasons.
That bears out what I said earlier that this was an industry subject to a special type of price control.
On the other hand, costs have risen substantially throughout the industry. In our view, the financial situation of the industry requires that, in adjusting admission prices and rates of Entertainments Duty, any such understanding should henceforth give way to the over-riding consideration that in the national interest the industry urgently needs much more revenue.
That was reported in November, 1949, and, I think, puts the dilemma in which we are all placed in a very fair, and, at the same time, very complete way.
I am not overlooking the need of the Chancellor to raise more revenue in order to meet the large re-armament expenditure. No one on this side of the Committee doubts the need for more revenue. Nor am I overlooking the desirability of syphoning off by taxation a large portion of additional money which is entering into circulation, or is liable to enter into circulation, during the next year or so, as a result of that re-armament expenditure by the Government. I think we all agree on that, but, on the other hand, we are faced with a situation in which the Government are to raise money by taxation for replenishing the funds of the Film Finance Corporation so that that Corporation can help an industry which, in the meantime, is being further weakened by the additional taxation which the Government are seeking to impose upon it. A situation like that does not seem to me to make sense.
9.0 p.m.
This is not a party matter, for all sides agree that the British film industry cannot, for reasons of public interest, be allowed to die. In these circumstances, there is surely an overwhelming case for a re-examination of the whole purpose and incidence of the Entertainments Duty. I have not said anything about the grievance which the industry feel at what they regard as unfair discrimination compared with other forms of entertainment, because I believe they have a perfectly sound case for a re-examination of the Entertainments Duty as it applies to the cinema industry on its merits.
In passing, it is well to remember that newspapers, for example, are proposing to raise their prices by 30 to 50 per cent. They are going to keep the proceeds, and are going to do so without permission. In the case of the football industry, I am told that there is a proposal, which they are looking forward to adopting, for increasing the admission from 1s. 3d. to 1s. 6d. Again, they are going to keep the proceeds, and, once again, they do not ask for permission. It is relevant to remember that out of that 1s. 6d., they only pay 1d. in tax, whereas the cinema, on an admission of 1s. 6d., pays no less than 8½d. in tax.
Finally, as I have said before, the cinema industry is subject to rigid price control, and, unlike many other industries, it has up to now been denied the right of automatic price review. As an Opposition, we have not, quite frankly, any detailed information which would enable us to put forward a viable alternative to the present Schedule in the Bill, and I venture to think that it is not the job of an Opposition to do so. But what we are perfectly convinced about is that, given good will on both sides, it should not prove impossible to reach an equitable settlement which would, at one and the same time, provide the Chancellor of the Exchequer with all, or nearly all, the additional revenue he wants and would relieve all sides of the industry from the fears they undoubtedly and quite genuinely entertain at present concerning the ill effects which, in their view, are bound to follow the present proposals as they stand.

Mr. O'Brien: The Committee is already aware of my special interest in the enter-

tainment industry. I represent the impoverished side of that industry—the workers. My approach to this question is very simple and direct. It is that if there is any spare money floating around in the film industry, or particularly in the cinema industry that money should find its way into the pockets of the cinema workers, and not into the Treasury.
I very much appreciate the statement made by the right hon. Member for Southport (Mr. R. S. Hudson). As far as I can see, he has approached this matter on a non-party basis, and I find myself—knowing something of the subject—in general agreement with what he has said. First of all, I cannot understand, and the majority of trade unionists in the film and cinema industry cannot understand, why this tax was imposed at all.
I, like many others, appreciate the problems of the Chancellor of the Exchequer. We know something about his difficulties and in my membership of the General Council of the Trades Union Congress I understand more fully and appreciate in a wider capacity something of the nature of the burden he has to carry. I say that so that my right hon. Friend may not be tempted to believe I am approaching this particular question merely from a selfish or partisan motive.
The £10 million which it is proposed to raise by additional Entertainments Duty on cinemas tempts me to believe the Treasury must have approached the matter in the same clumsy way as it approached the imposition of the Dalton duties a few years ago. When the Dalton duties were imposed, they sounded the death knell of the film industries in this country. Up to that moment the industry as a whole was prospering and progressing. There was hardly a grievance from the producers, exhibitors and distributors, and certainly not from the trade union element on the production side of any section. From that day onwards things deteriorated, depressed and degenerated financially to such an extent that the British film production side of the industry is becoming an object of pity and ridicule throughout the world.
I attribute that to one thing only and that was the mistake in policy on the part of the Government at that time. I hope, therefore, that the Chancellor of


the Exchequer, who is equipped not only with knowledge as a Chancellor but with an inside knowledge of the economic affairs of the British film industry will, with that twin knowledge, have regard to the particular position of the industry as it is today rather than merely saying bluntly, "I want to raise £10 million. I will plonk it on the cinemas and get it that way."
There is much loose talk about the so-called prosperity of the cinema industry. I hold the view that the exhibiting side of the industry is more able to meet its obligations with regard to taxation and in other ways than is the production side. I know that exhibitors are, on the whole, not by any means yet on the doorstep of Carey Street. What one must realise—and I am not here arguing the case for exhibitors but for the industry and, in particular, for the lower paid people in it—is that when one reads the balance sheets of the large and independent exhibitor circuits one is tempted to jump to the superficial conclusion that here is an Eldorado. I think my right hon. Friend and his Department may have fallen for that same bait.
If the exhibitors of this country were required to carry out the conditions imposed by local licensing authorities all over the country with regard to all kinds of rehabilitation measures to which since the war a blind eye has been cast, much of the profits shown on the balance sheets of the companies would be obliterated. One feels like having a bath when one comes out of some cinemas, largely due to the fact that no capital expenditure is permitted on re-equipment. If cinemas had to be re-equipped I do not know whether there would be any profit at all. I am speaking quite honestly and objectively in this matter and I approach it on a non-party basis.
When many of my hon. Friends talk about the treasures and the prosperity of the industry they do not realise that the money which was made during the war and the apparent partial prosperity of the cinemas since the war is not because the exhibitor has profiteered at the expense of the public; it is due entirely to increased takings, through tax. I do not want to detain the Committee at any great length, but let me give some facts. In 1939 the 1s. admission left the exhibitor with 10d.

The 1s. 3d. admission left him with 1s. 0½d. The 1s. 6d. admission left him with 1s. 3d. The 1s. 9d. admission left him with 1s. 5d. The 2s. admission left him with 1s. 8d.
The position today—and I am using the figures briefly, and they are known to my right hon. Friend—are as follows. Out of the 1s. 3d. admission into the cinemas the exhibitor is left with 10½d. Threepence is charged to the public and a farthing is left to the exhibitor. Out of the 1s. 6d. admission today the exhibitor is left with 11½d. Out of the 1s. 10d. admission the exhibitor is left with 1s. 1d. Out of the 2s. 1d. admission the exhibitor is left with 1s. 2½d. I am not dealing with the allocation of the levy at all—that is, the half-penny which is floating around. Out of the 2s. 4d. admission charge the exhibitor is left with 1s. 5d. Out of the 2s. 10d. admission he is left with 1s. 8¼d. and out of the 3s. he is left with 1s. 9½d.
If we compare the net takings of the exhibitor in 1939 with the net takings per seat by the exhibitor today we shall see that there has been hardly a change in net prices of admission to the exhibitor in 11 years which have passed. Altogether, 98 per cent. of the increase in prices of admission to cinemas has gone to the Treasury. These are undisputable facts.
It is very difficult to get the layman to understand how it is that this 10 years of so-called prosperity came to the exhibitor. We all know about the war years, about the readjustment of population, about the millions of our troops and of our friends from America and other countries; all that went to create a demand for relaxation and leisure. We all know of the tributes which were paid by the right hon. Member for Woodford (Mr. Churchill) when he was Prime Minister, by our present Prime Minister, by leading members of both parties during the war and since, to the work done by the cinemas of this country in maintaining the morale of our troops and of our workers, especially our armaments workers.
The prosperity of the industry is largely due to that increased patronage, but in the event of some unforseen or unpredictable reaction on the part of the public to their habits of recreation, and in the event of the cinema-going public of this country decreasing—which can easily


happen if good films are not shown to the public; in the event of the patronage falling to the standard of 1939, the film industry of this country would go bankrupt overnight—and that is a fact which I think my right hon. Friend should realise.
I make these statements because I know they are true. I have to listen to them every month in my capacity as a trade union leader trying to represent my own members in the industry. We are very alert against being led up the garden path. The exhibitors as an organised body in the industry are our mortal foes. We have a wage claim—a justifiable wage claim—before the cinemas industry.
We are asking for wage increases for our cinema technicians and our cinema staffs—the young ladies who are so kind and courteous to the workers and the public generally in serving them, in showing them to their seats, and in generally maintaining safety in the cinemas, and making our social life, especially the social life of the humbler workers, pleasant and kindly. It may interest the Committee to know that the average wage paid to the female labour force in the industry is less than £3 per week for a full-time week. The overall average wage—this is established by the Board of Trade's statistics—is less than £4 5s. per week for cinema workers. The average wage rate for 70 per cent. of cinema workers of all grades is less than £3 15s. per week.
9.15 p.m.
Therefore, there is a case. One may be asked, what has the union been doing? The union has been working hard. In the cinemas, as distinct from the production side and from the live theatre, there has been no trade union tradition at all—until about ten years ago. It was difficult to organise that industry. I personally have devoted 30 years of my life to that task, and I think I have done what I can to try to raise the standards of the lower placed employees in the cinemas and on the production side. Nevertheless, it is true that in ten years we had to do a great deal of work, including the war years with all their industrial problems—the absence of labour force and the difficulty of getting staffs, and so on. It is perfectly true we had to do in ten years what other unions have done in 60 or 70. With the absence of

a trade union tradition in the industry that leeway could not be made up at all in ten years.
As a fair-minded and practical trade union leader, I have to say that the exhibitors are not fully responsible for the bad conditions which exist today. It is largely a joint responsibility. My hon. Friends on this side of the Committee who are trade unionists will understand what I say. The inability and unwillingness of cinema staffs 25 and 50 years ago to join a trade union to have their conditions improved and protected are partly responsible, with the exhibitors, for conditions as they now exist. However, that belongs to the past.
I look upon these average wage rates that I have quoted, and quoted with accuracy, and I find that the Government—a Labour Government whose interest in the workers is beyond question—in the administrative sense of Treasury economics, are embarked on a taxation policy for the cinema industry that has knocked the wages scheme of my organisation for six. I had the great pleasure of meeting the Financial Secretary the other day with representatives of my executive, and I had the greatest courtesy from him, and great understanding of the Treasury view point. I do not want to suggest for one moment that taxation policy can be wrapped up with a system of collective bargaining. It is the duty of each union to see that its workers conditions are protected. It is not necessarily the duty of the Treasury. On the other hand, I cannot divorce my mind from the principle that a Labour Chancellor of the Exchequer should have regard to the economic conditions in an industry on which he proposes additional taxation.
One last point with regard to the effects on the production side of the industry of this taxation. We welcome in the industry what has been termed the Eady plan. It is not in order, I understand, to refer to the Civil Service, but I do wish to show sympathy with and offer congratulation to Sir Wilfrid Eady for the patience he has shown. He has had to engage in the most difficult negotiations. We in the entertainment industry—in the film industry—are a house divided. Even on the trade union side of the industry we are a house divided, unfortunately. It is to his great accomplishment and patience that already he has been able to devise


some kind of plan that has assisted the exhibitors' interests and, in the main, the production interests.
Negotiations, I understand, are continuing. I hope that whoever replies to this debate will give an indication that these negotiations are continuing, and that they will solve this very vexed problem of a deadlock between the Cinema Exhibitors' Association and my right hon. Friend's Department. I hope the Chancellor of the Exchequer will not misunderstand me because of what I am going to say next. Producers are having a very rough time at present, and it is partly true that the resources of the Film Finance Corporation are diminishing. Those of us who are also concerned with production are somewhat terrified at the immediate prospects. There is money coming from nowhere, and the only source we can look to at the moment is whatever the Eady plan may bring about in the future.
If my right hon. Friend imposes this tax it does not necessarily follow that the public are going to pay for it. It is stated somewhat erroneously that the public pay the tax, and while that generally may be true the man who is accustomed to pay 1s. 9d. will not necessarily pay 1s. 11d. in the future; in future, he may go to the 1s. 3d. seats. The family, which has been going to the 2s. 9d. seats, may make up their mind to go to the 1s. 10d. seats, and the overall effect of that is not only diminished takings to the cinema but diminished returns to the Treasury, which, in turn, will diminish the amount of the Eady pool and the amount which goes back to the producers, so that the last state will be worse than the first.
I end as I began. If there is any surplus money, if there is any money which can be earned over a certain reasonable expenditure, that money ought to find its way into the pockets of the lower paid workers of the industry whom the producers employ. My own organisation represents over 80 per cent. of the entire labour force in film production. We represent not distribution but the overwhelming mass of the workers in production. That overwhelming mass in production are also the lower paid workers, and if producers want to get more money from exhibitors—and many distinguished people have been talking about money going into the wrong

pockets, a subject on which I shall have something to say in another place—then the producer should, first of all, see that more money goes into right pockets, and the right pockets are those of the employees that they employ. These exhibitors ought also to study in certain trade unions an inflationary wage system, which ought not to be encouraged.
I offer these comments in the hope that something can be done about the negotiations, which I understand are not entirely broken off. I hope I shall have the sympathy of the Committee for the suggestion that we as an organisation are right in trying to obtain proper wage scales in the cinema industry, and I hope my right hon. Friend will not forget that in his admitted difficulties.

The Deputy-Chairman: Mr. Jennings.

Mr. Ivor Owen Thomas: On a point of order. Is it possible at this stage for me to make a suggestion which might clarify the issue for subsequent participants in this discussion? It is that the Chancellor of the Exchequer might throw some light upon the present negotiations which, according to the statement just made by my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien), are taking place in regard to the relationship between the Treasury and the industry.

The Deputy-Chairman: That is not a point of order.

Mr. Thomas: May I make that suggestion?

Mr. Jennings: I rise to support the position of the cinema exhibitor which I have followed pretty closely for some years. I appreciate the fair way in which the hon. Member for Nottingham, North-West (Mr. O'Brien), has put the case. He has been perfectly fair about the buildup over the last 10 years or more. This industry, from the exhibiting angle, has now reached saturation point. Any further increase in Entertainments Duty will have the effect of reducing considerably the working capacity of the exhibitors themselves.
For example, the costs of running a cinema today are out of all proportion to what they were some years ago. Seats which cost about £1 to replace a year or so ago now cost something like £5. The same is true in regard to replacing the


strips of carpet which comply with local government conditions. The heavy burden of Entertainments Duty has added to the costs carried by the cinema exhibitor.
Some time ago the live show was given a concession. I believe that live shows are doing very well today, although I do not know for certain. They are doing much better than before they had the concession. A shilling seat in a cinema carries a duty of 3½d., while in a music hall the shilling seat is free. On the 1s. 9d. cinema seat the duty is 8d., as compared with 2d. in a music hall. The cinema exhibitor is grossly over-taxed, and discrimination has been unfairly shown against him in comparison with the live show. The position has been reversed, and now the cinematograph exhibitor has a case for sympathetic consideration from the Chancellor because of the ever-increasing costs he has to bear. It is accepted that cinema proceeds up and down the country have tended to fall during the last few months because of the increased Entertainments Duty.
The time has now arrived for the whole system of entertainments taxation to be gone into with the industry, to see if some better system can be found than the present one of so much offered to the Treasury and so much to the exhibitors. That system exercises an unfair control on the exhibitor which does not operate in other industries. I ask the Chancellor of the Exchequer to look into the position to find some other form of taxation which will operate on a fairer basis and allow the position to be seen more clearly. The exact position is apt to be fogged at present, and that is no good from the point of view of either the Treasury or the exhibitors; nor is it good from the point of view of the public who have to pay the Entertainments Duty.
The general opinion is that cinema exhibitors make large fortunes, but the amount of taxation taken from cinema profits is colossal compared with other industries. These profits bear the ordinary Profits Tax and Income Tax, and also the heavy Entertainments Duty, and the industry also has an ever-increasing burden in the amounts paid to the renters. I urge the Chancellor to pursue negotiations with the industry to see if a satisfactory settlement can be reached, and I trust he will bear in mind the considerations

which have been put forward from both sides of the Committee.

Mr. McGovern: I also urge that consideration be given to our exhibitors. I did not know until yesterday how poorly paid were the employees in this industry. We have already been given certain facts. Yesterday I met the managers of the cinemas in my area, and I also heard certain facts. It amazed me that in those cinemas men were being paid £4 2s. 9d., less insurance, for a 48-hour week and girls £2 13s. 3d., less insurance, for 44 hours.
9.30 p.m.
In one cinema a young woman responsible for taking over £1,000 a week in the box office was paid the "handsome" amount of £3 3s. 6d., less insurance, for a 48-hour week; and she was responsible for making up any money that might be short, something that frequently happens in box offices. The companies are very firm about demanding that such money shall be made up by employees. An operator beginning to serve his time is paid £1 14s. 6d. a week, less insurance, and has a 3s. increase every six months. That is a shocking situation compared with a large number of trades in which boys start at double that income.
The industry has had imposed upon it time and time again additional burdens in the shape of taxation. There is a limit to what the people can pay. I may appear to be here in the role of defending private enterprise, but if we recognise the right of an industry to be run by private enterprise, it is our job to see that the industry is able to fulfil its obligations to its employees and to provide decent, well equipped, clean and healthy houses of entertainment for those who visit them for an evening's or an afternoon's entertainment.
The cinema industry cannot be compared with a football match, a dog track or a speedway, to which perhaps only one member of a family may go. The cinema provides family entertainment. Three, four, or five members of a household may go to the cinema, and they all have to bear these additional burdens. Sometimes we get into the habit of saying, "It is only a few extra coppers." But let us remember that last month butter went up 6d., tea went up 4d., and milk will go up by a ½d. a pint at the end of this month. And these additions


are being imposed all the time, whereas there is a limited income which can be drawn upon. One manager said that frequently he has to tell people who go to the box office that the 1s. seats are all occupied but that they can get in for 1s. 6d. He said that a year or two ago they would have paid the 1s. 6d., but now they go back into the queue because they have not the surplus cash.
I think the people in this industry are being exploited, because there is a greater amount of taxation upon it than is being imposed on almost any other form of entertainment. If it is an entertainment which people ought to be encouraged to enjoy, we should see that prices charged by the exhibitors are as low as possible. We must remember the over-crowding of homes due to the housing shortage, the dull, dilapidated types of houses in many parts, and that the only recreation of a large section of our people is an evening at the pictures. They have very little colour in life, and therefore they get out to see romance, the Mounties, the gangsters. They see every form of entertainment according to their taste, and we ought to ensure that they enjoy it as much as possible.
In passing, I have a confession to make. If I had any amount of spare time I would spend a great deal of it in the cinema, only I would choose my films. [An HON. MEMBER: "Romance?"] Yes, because I have had my days and my moments. Therefore, I say that we ought to make it as easy as possible for people to come out of themselves occasionally instead of imposing taxation that becomes almost penal. It is true, as has been said by the two previous speakers, that if the cinemas, many of which are in a bad condition, were to fulfil their obligations to re-cover seating, to put in new carpets and to clean up the buildings, many of them would be bankrupt. For instance, tapestry for re-covering seats has gone up by 430 per cent., and we all know the considerable increase that has taken place in the price of carpets.
We are keeping these cinemas in a bad state where most of our constituents spend a certain portion of their time, whereas it is our duty to provide opportunities for putting these places in a decent condition so that people can enjoy

them comfortably. It appears, from figures and facts given to me, that there is too small an overhead given to the industry to improve the conditions of its employees. In some of the houses in working class areas, managers are paid £8 or £9 a week and under-managers £7. Nobody can say that these are exorbitant salaries, and the same can be said of every employee in the industry. We have an obligation, especially with a Labour Government in power, to see that the industry has the finances which enable it to pay decent salaries and to provide decent conditions for its employees and decent houses for the mass of people who patronise it.
I have been impressed by what I have read, what I have heard, and what I have seen, and I say that the increase in tax on the children's seats at the afternoon matinee is one of the worst of the whole lot. I appeal to the Chancellor, whilst knowing that he has to raise a considerable amount in taxation for re-armament purposes, to realise that each industry can bear a certain proportion of tax that is reasonable and for which it ought to be responsible. I think that the tax on the cinema industry is unreasonable and should not have been carried to the extent indicated by the Chancellor in his Budget, and I appeal for second thoughts in regard to his proposals.

Earl Winterton: I do not think anyone who has followed my long and humble political career would say that I am by nature effusive, certainly in the House of Commons, and I hope it will not be thought effusive on my part or patronising or impertinent if I say that in my very long experience of the Finance Bill debates in Committee I have never heard four more powerful speeches than those just delivered in asking for the reconsideration of a particular tax proposal. I think it would be very difficult for the Chancellor and the Financial Secretary not to promise to give some reconsideration to this matter. My only reason for rising is to put certain questions, because my right hon. Friend, in an admirable speech, has already deployed the case—hon. Members opposite may perhaps laugh at this, but it is not a party political matter, as is proved by the last two speeches—not only on the general question of the taxation but also on its moral aspect.
I do not think, as I have said, that the Government can fail to give this matter further consideration, but before I put my questions I want to say that the two speeches from hon. Members opposite to which we have just listened were very courageous and, probably, will not be popular with some of the hon. Members opposite. The two points which were made by both hon. Members are perfectly correct. Undoubtedly, the wages paid to people in the cinema industry are still unquestionably low. Although I have no right to pledge my colleagues who are engaged in the industry I think that if the industry was relieved of some of the burdens that the House and the Government have placed upon it, its first duty would be to improve conditions.
I took down certain words of the hon. Member for Nottingham, North-West (Mr. O'Brien), and should like to quote them. Hon. Members opposite will have difficulty in answering them. The hon. Member said that he was sorry to have to tell the Committee that the Government had embarked upon a course of taxation that had "hit wage claims for six." That is a very serious statement, coming as it does from an hon. Member who, although I may sometimes have quarrelled with him—not personally, but only because we were on opposite sides of the table—is very much respected as a trade union leader in what is, after all, a great industry.
With those preliminary remarks, I want to put my question. In discussing this cinema matter we ought to consider the genesis of the Eady plan. We have already had a short debate on one aspect of it on the last Amendment. What was the genesis of the Eady plan? A number of hon. Members in all parts of the House—including the hon. Member for Nottingham, North-West, and other hon. Members opposite, two or three hon. Members who were in the last Parliament, myself and others—from an entirely non-party point of view, again and again raised in debate the question of the taxation upon this industry. Both the hon. Member for Nottingham, North-West, and I spoke again and again on the subject in the last Parliament.
I think the hon. Member who knows the industry from A to Z will agree that as a result of these representations made outside and inside the House and the

emphasis which we place on certain methods referred to by the hon. Member for Shettleston (Mr. McGovern) eventually the Eady plan was produced. In other words, it was our action inside and outside the House, the action of the industry and of those friendlily disposed towards it which was the genesis of the plan and, although the industry did not get all it wanted out of the plan, the hon. Member for Nottingham, North-West, will agree that there was an agreement to accept it at the time.
9.45 p.m.
The question I want to put most emphatically to the Government is: Why has it been upset now? I say it was inherent in that plan that it was to be allowed to run for a year: but it is only to be allowed to run for 11 months. I have never heard of a similar incident when there has been a perfectly proper agitation concerning an industry followed by negotiation—we could not find anyone more competent to represent the Treasury than Sir Wilfred Eady—and an announcement is made to the House and the industry that although it is not all we wanted the industry accepts the settlement and within a year the Chancellor has come here, and with the minimum of words, told us that the whole thing is to be upset. If the answer is, as I imagine can be the only answer, that the Treasury want more money, why do the Government continue this form of discrimination against certain forms of entertainment? Why is there discrimination against racing and the cinema, both of which trades have an export value? It is very difficult to build it up, but at long last the export of films is beginning to be successful. Why is there no raising of the tax on other forms of entertainment?
Everyone knows my connection with the industry and I do not want to appear to be unduly biased, but I think there is a good deal of British hypocrisy and humbug about the alleged immense cultural superiority of the live theatre over the cinema. Are we really to be told that a nearly nude revue, the "Folies Bergere,' has any great cultural value, or to go to listen to a brawdy Restoration or 17th Century comedy—one should not be shocked after 46 years in the House of Commons? In connection with a charity performance, I went to see "Love for Love" and I was profoundly shocked by it. There really


is a great deal of nonsense talked about theatrical cultural values. There seems to me no reason for this vast discrimination.
Then there is the question of football matches. If we are to raise more money one would have thought that football might have made its contribution. We have always avoided any purely party argument on this matter, but would it be unfair to suggest that the Government, possibly in their selective attitude in regard to entertainments, are saying that one entertainment should be taxed out of existence and the other should be left alone from a political point of view as it would be unwise to offend people who attend football matches but would not matter about people who go racing? If so, the Government will be surprised at the memorial received this afternoon because, after all, 3 million people have some electoral effect. At any rate, there has not been an explanation.
There are only two other matters I wish to raise. My right hon. Friend put very definitely a question to which I hope we shall have an answer, as we have not yet had an answer. We did not get an answer in the Second Reading debate. The question is: Why have the Government repudiated and rejected the Plant Report recommendations? My right hon. Friend quoted a passage from it which was quite definite about the industry being overtaxed at that time. No one can deny that that was a very important Committee.
Another point, made by my right hon. Friend the Member for Southport has never been answered. I hope that it will be answered by the Financial Secretary, who, I understand, is to follow me. The Government agree, in principle, to give more money to the Film Finance Corporation to help the industry because they consider that the industry is in need of help, but meanwhile the Government wish to take more money out of the industry by taxation.
That is only illustrative—this is almost my last sentence; I am afraid it is political, but I cannot help making it—of the fantastic absurdity that arises in the whole life of this country when the Government interfere, as this Government do, with every aspect of national life. Directly the Government start that sort of interference, as they are doing by this selective Entertainments Duty, it is bound to pro-

duce anomalies of that kind. I hope that we shall have an answer to the points which have been put, and that in view of the feeling on both sides of the Committee the Government will tell us that they will give further consideration to this matter between now and the Report stage.

Mr. Jay: It may be for the convenience of the Committee if I intervene now, because the Government have been asked to give some information about the state of the negotiations with the industry. We have had a rather constructive, and for a Finance Bill unusually non-partisan type of debate. Even the noble Lord, until almost his last sentence, rose to the level which had been set by other speakers.

Earl Winterton: That sounds rather like one of those Wykehamist compliments.

Mr. Jay: It is intended as a compliment. I think there is agreement on two points. The first is that we all wish to see a prosperous and successful British film industry. The second is that it is not unreasonable that entertainment, among other things, should make some contribution to the cost of defence this year.
The right hon. Gentleman the Member for Southport (Mr. R. S. Hudson) quoted the Plant Report, which recommended concessions in Entertainments Duty on films, and the noble Lord asked why the Government had not carried out the recommendations of the Plant Report. My first reply to that is that I understand the industry itself, though no doubt in favour of that part of the Plant Report which involved a reduction in tax, nevertheless was not so willing to accept other sections of that Report. The second is that the Report was published in November, 1949, which was some time before we embarked on the present re-armament programme. That naturally alters the circumstances of the case.
I thought that the speeches of both right hon. Gentlemen opposite neglected what is surely the basic fact in the whole of this controversy. I do not think that either the noble Lord or my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien), who are both much greater experts on the cinema industry than I am, would deny the fact that the main trouble


in the British cinema industry—not the sole trouble but the main one—is in the producing rather than in the exhibiting side. A mere reduction in Entertainments Duty would therefore make very little contribution towards solving that main difficulty.
It is the case that if there were such a reduction of duty only about one-tenth of what the Exchequer would relinquish—I do not think that this is disputed—would go to the British film producers. The great majority of it would go to the exhibiting side of the industry, including, of course, a number of American companies. Therefore our policy has been, and still is, to try to make an arrangement with the industry as part of an agreement over the rates of tax and the prices for seats by which a reasonable sum of money, originally derived from those who go to the cinema, should be set aside for British film production.
The first effort in that direction was what is known as the Eady plan which was referred to today. Roughly speaking by that plan, which was associated with last year's Budget, seats of 1s. 9d. and upwards were raised in price by 1d., which worked out at an average of about ½d. increase in seats overall. The Exchequer made a contribution of £300,000, and as a result of this about £1¼ was available for the producers and a further £1¼ for the exhibitors.
The noble Lord asked why the Eady plan had been abandoned. It would be quite misleading to say that the Eady plan has been abandoned. That arrangement and that levy are continuing. What we are proposing this year is, in effect, to superimpose on the first edition of the Eady plan a further edition very much on the same general lines. Our proposal in the Budget was, as the Committee will remember, that seats below 6d. should not go up in price at all; that from 6d. to 9d. they should go up by 1d.; from 10d. to 2s. 10d. by 2d. and above that by rather more. Altogether that would have yielded £10 million to the Exchequer in a full year, of which we proposed to forego about £2½ million, or ½d. per admission ticket, which would have represented £2½ million. Most of that under the Budget plan was to have gone to the British film producing industry.
After the Budget, counter proposals were put forward by the industry in

negotiating with the Treasury. We found those proposals to be quite unacceptable, mainly because too much in our view would have gone to the exhibiting side of the industry and much too little to the Exchequer to meet our needs in the present budgetary situation. That plan also would have involved an increase of 3d. in the price of the main seats. Indeed, I may say that all the proposals submitted to us by the industry, both before and after the Budget, have involved increases in the price of seats. I am not quite sure whether that was realised by those members of the public who signed the memorials and so on to which the noble Lord referred.
10.0 p.m.
Since that seemed to us unacceptable, we have made a counter proposal roughly on the basis that seats up to 1s. remain at the pre-Budget price—that is to say they do not go up at all—but that the more highly priced seats go up by rather more than was originally proposed.
That was the main basis of our proposal. It has a number of advantages to all concerned. First, it safeguards the reasonable revenue which we feel we must have from this duty this year. Second, it keeps down even further than our original proposal the price of the lower priced seats. That should be a special benefit to the children and, indeed, to the old age pensioners. It should also benefit the country cinemas, many of which are small cinemas and have already benefited from the special exemption given to cinemas in rural areas in the Budget two years ago.
I can also assure the House that under these proposals, the children's matinees would remain exempt from any increase in price. As the question of small cinemas is relevant, I should also like to recall that there was an exemption from the levy under the original Eady plan for all cinemas taking less than £125 a week, which again was a further advantage to the small cinemas. Finally, I can give an assurance on this point that we will, in any case, in the course of the Bill amend the Schedule so as to exempt the 6d. seats and possibly the 7d. seats from the 1d. rise.

Mr. Edgar Granville: The hon. Gentleman has mentioned higher priced seats. Can he define more clearly what he means in that respect?

Mr. Jay: As we are in the middle of negotiations, I do not want to go too far into all the details under discussion. The general principle was that of a small rise in the charge for the lower priced seats and a higher rise on the others.

Mr. Shepherd: Will the hon. Gentleman indicate what proportion of the increased prices will go to the industry?

Mr. Jay: I was coming to that point. The third advantage of this scheme is that a substantial sum would accrue, on our proposals, to the British producing industry, which we think should be sufficient to enable them to meet their difficulties in the coming year. It is generally agreed that last year's levy under the Eady plan, and the British Film Production Fund which was set up as a result, has worked well and has been of great use in maintaining British film production.
Our proposals would also provide the exhibitors with a material increase in revenue which, in our view, would fully recognise the rises in cost which my hon. Friend the Member for Nottingham, North-West, described. It is true that the exhibiting industry has been faced with rises in cost and with some difficulties, though they were not nearly as great as the difficulties of the producing side of the industry. We should not paint too lurid a picture of the difficulties of the exhibitors at present.
The figures show that attendances have been pretty well maintained throughout 1950 compared with 1949. Indeed, total box office receipts in 1950, after payment of the tax, were actually slightly higher than they were in 1949.

Mr. Jennings: What about the costs?

Mr. Jay: I agree with the hon. Gentleman. I was coming to that point. In the first quarter of 1951—coming more up to date—receipts after tax were almost identical with those for the first quarter of 1950. It is perfectly true that costs have risen, and it is for that very reason that, on our proposals, an additional revenue would accrue to exhibitors as well as producers.

Earl Winterton: Will the hon. Gentleman allow me? This is my first interruption. He must realise that it is not

only a question of costs having increased enormously, but also a question of accumulated deferred repairs, which, as was mentioned by the hon. Member for Nottingham, North-West (Mr. O'Brien), cannot be put into operation, but which represents an enormous capital expenditure.

Mr. Jay: I quite recognise that, and we are not leaving it out of account, but against that, it can be said that quite substantial profits have been made in recent years.
We regret that, in spite of the advantages as we see them to all concerned in this proposal, the industry, as I think is generally known, has at present decided not to accept it. I think that is a pity, because even on the narrow view it would have given more assistance to the industry itself than the Budget proposals, which would otherwise go through if no agreement of this kind can be reached. Negotiations, however, are still going on. We have an open mind on the details of these arrangements, and there is indeed still time before the Report stage to reach agreement, as we hope to do, on our proposals or perhaps on some refinement of them.
The real fact about the industry is that a straight cut in Entertainments Duty will not help, because nine-tenths of the money relinquished by the Government would not go to the producing side of the industry, where there is the main trouble at the present time.
The right hon. Gentleman the Member for Southport spoke in a very moderate and constructive manner on this subject, and my hon. Friend the Member for Nottingham, North-West, described some of the conditions in the industry, and gave information about some of the wage claims in which he is naturally now concerned. It would be most undesirable, as my hon. Friend would agree, for the Treasury to intervene or get involved in these wage negotiations, or indeed for me to express any opinion about them here tonight. I can assure him that we have not overlooked the various points he brought forward, which he explained to me in a meeting recently.
Therefore, it is our hope that, in the spirit in which he spoke and in which the right hon. Gentleman the Member for Southport also approached this problem these negotiations may continue. We


think it is perfectly possible to reach a reasonable solution, roughly on the lines we propose, and we very much hope that the representatives of the industry will look at the matter in that light.

Mr. O'Brien: May I put two questions to my hon. Friend? I would remind him that the Plant Report was issued in 1949, but would he not agree that the Cinematograph Film Council, by the unanimous decision of those members present, did write to my right hon. Friend the President of the Board of Trade a fortnight ago representing or reiterating some points and asking that they should be submitted to the Chancellor? Secondly, during these negotiations, would my hon. Friend not agree to consider most favourably an inquiry being held immediately in the ensuing year for a completely new basis of the Entertainments Duty system?

Captain Duncan: I think that the speech of the Financial Secretary to the Treasury has strengthened the argument for leaving this Clause out of the Bill. He has mentioned a series of negotiations which are going on, about which he has given the Committee only one figure. It is that seats up to 1s. should be left as they are. But the corollary of that which the hon. Gentleman did not mention is, surely, that the dearer seats, those costing 1s. 9d., 2s., 2s. 4d. and so on will be proportionately higher in price. Therefore, it seems to me that if negotiations are to go on, it would be much better to leave out this Clause now and to allow the Government and the various sides of the industry a free field in which to negotiate, on the understanding that if no agreement is reached by the time we come to the Report stage, a Clause required by the Chancellor will then be inserted by him.
I have known this industry for a long time. Before the war, I followed with close attention the Cinematograph Films Act through all its stages in the House. At the end of the day that it became an Act, I was very glad to get rid of the Bill. I felt like saying, "A plague on all your houses."
I have no doubt that the Financial Secretary is saying the same to the various sides of the industry today. Since then, in Finance Bill debates and on the Film Finance Corporation. I have kept well out

of the way because I know the extraordinary difficulties which arise from the various aspects of the industry. But this year I must intervene because I have received some figures from a group of cinemas in my constituency which, I must admit, astonished me. One of the cinemas in this group is in the constituency of my hon. Friend the Member for Fife, East (Mr. Stewart), but the remainder of the group are in my constituency.
I have in my hand detailed extracts from the audited accounts. They have been given to me in confidence, but I have no doubt that the group would be prepared to let me hand them over to the Chancellor for his personal examination. These figures show that since 1947—it is a private company—no directors' fees have been paid, no dividends have been declared, no depreciation has been allowed for in the accounts, and that since that date there have been accumulated losses. In 1948, there was a debit balance of £147. In 1949, there was a debit balance of £339, and 1950 a debit balance of £617. That means that for the last three years—I have not got the 1951 figures—there has been an accumulated debit balance on this group of cinemas of over £1,000. The annual turnover of the group is in the region of £18,000 to £20,000.
I visited one of the cinemas in the group. I was taken into it in the daylight when the audience was not there. It is thoroughly shabby. A certain amount has been allowed for necessary renewals and repairs, because such things as seats get broken. There has to be a certain amount of repainting and redecoration, but nothing, as I say, has been allowed for depreciation. Even so, the seats in this cinema are old-fashioned and the upholstery is beginning to deteriorate. The place needs repainting, and in its present condition is no credit to a British holiday resort.
10.15 p.m.
If we are going to attract tourists to this country we must have attractive, modern, decent, clean, up-to-date places to which to attract them when they come to our holiday resorts. Therefore, I hope these facts will impress the Treasury, which I have stated very briefly. The Financial Secretary to the Treasury talked about the producers' side being the big trouble, but on the exhibition side


there is real trouble too and the industry is no longer profitable.
A case was made a few years ago for the small rural cinemas. The grounds were that the industry in those parts of the country was unprofitable, but here it is spreading to the smaller towns where gradually, as the hon. Member for Nottingham, North-West (Mr. O'Brien) said, these cinemas are gradually facing bankruptcy. They cannot make the places up-to-date, they cannot pay directors' fees, they cannot pay dividends and they cannot make ends meet. Therefore, I think there is a very strong case for asking at any rate for part of the £10 million the Chancellor wants, to give a chance to exhibitors and allow them at least to make ends meet.
In the document which has been circulated by the Cinematograph Exhibitors' Association there is a table which has been referred to already by my right hon. Friend the Member for Southport (Mr. R. S. Hudson). I do not want to go into very great detail, but this table quite definitely shows that among the smaller cinemas, earning £7,500 or less, the total profit for 13 cinemas in 1947 was £6,700 and, in 1950, £1,500. I think those figures prove that the figures I have given for my constituency circuit are borne out in other parts of the country. Therefore, I hope I have made out a case for some alleviation for the cinematograph exhibitors in this difficult problem of how to deal with the cinema industry.

Mr. Michael Foot: The hon. and gallant Member for Angus, South (Captain Duncan) seemed to claim that the whole of the exhibition side of the industry is affected by the same kind of difficulties as only affected a small part some years ago and that the whole of the exhibition side is now in very considerable difficulty. I doubt very much whether that claim could be borne out by examination at any rate of the balance sheets of the main circuits throughout the country. I must say I do not think that these statistics relating to the selected 13 cinemas quoted from the Cinematograph Exhibitors' Association's pamphlet are very convincing, because nobody knows how the cinemas were selected. Hon. Members opposite complain about Government statistics, but if any Government Department produced statistics so open to

attack as these, I do not think they would be regarded with any credence at all. Therefore, I do not think it is open for hon. Members to claim that the whole of the exhibition side of the industry is in difficulties.
The noble Lord the Member for Horsham (Earl Winterton) spoke very movingly about the low wages in this industry and how shocked he was to hear what my hon. Friend the Member for Nottingham, North-East (Mr. O'Brien) had to say about those wages. The noble Lord must have heard a great deal about low wages in other quarters. He has transferred himself out of the Chamber at the moment but he might transfer some of his eloquence in the House of Commons to his board room. If there are complaints about low wages in the film industry, and in that side for which my hon. Friend the Member for Nottingham, North-West, is responsible, the noble Lord has an opportunity to make recommendations to the film companies with which he is associated.
They are some of the richest in the country and have been making heavy profits in recent years. He might recommend that they might distribute some of those profits which amounted to some £700 million or so in a recent year. [Laughter.] Sorry, £700,000. I am guilty of slight exaggeration but the figures are so enormous that anyone would be pardoned if he made a mistake. If hon. Members want the figures they can have them. The net profit for the two companies with which the noble Lord is associated, Odeon Properties Limited and Odeon Associated Theatres was £777,000 net profit, and in the report which Sir Arthur Rank made to the meeting he said that Odeon Associated Theatres, and Odeon Properties were not concerned with the results of film production and that so long as exhibition continued to be a profitable business, there should be no doubt of the company's ability to meet the obligations of its prior charges. Apparently among the prior charges the wages of the workers in that industry are not included.

Mr. W. Fletcher: What year was that?

Mr. Foot: I am perfectly prepared to state the year. It was 1948. I have not got the figures for 1949, but if those companies with which the noble Lord is associated made a loss in that year, I am quite


prepared to pay the wages of both concerns out of the monumental profits made by the newspaper the "Tribune" with which I am associated. Everyone knows that the profits of those two companies were enormous, and the right hon. Gentleman cannot ride off on that kind of statement.
A very interesting statement was made by the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson) when he said—and this was a very good admission and should be made clear to all those who signed the petition, about which so much has been heard in the last week—that no one on the Opposition side would deny the need for the Government to raise more revenue. There is no argument about that. I do not know if some hon. Gentlemen opposite, who came in late, heard their spokesman say that, but it has been admitted by the Opposition that there is a need to raise more revenue. I am not sure whether he was referring to the Budget as a whole or to this particular item, but it certainly was a formidable admission, because it destroyed most of the rest of their case.

Mr. R. S. Hudson: The hon. Gentleman has quoted me, but I do not see what he or any other Member could take exception to in that statement. We all realise that if there is to be re-armament it has got to be paid for, and to pay for it we have to raise more revenue.

Mr. Foot: I was not criticising the hon. Gentleman, but picking out from his speech the only part of it which I could commend. It was the only part which faces the situation. Once hon. Gentlemen opposite have admitted it is necessary to raise more revenue, it is no use going up and down the country suggesting that there is no need for further taxation at all and rest a campaign on the basis of no more taxation being necessary from the Entertainments Duty.
The right hon. Gentleman the Member for Southport also went on to say that it was very strange to raise money in taxation in order to distribute it back in the same industry through the National Film Finance Corporation. It is not so strange at all, because the money would never get back to the producers unless it were raised in that way. If taxation were reduced, the money would not seep back to the producers. That

would not happen precisely because of the way in which the film industry is at present organised. In fact, almost every section of the industry and certainly all the trade unions in the industry, except that with which my hon. Friend the Member for Nottingham, North-West, is associated, are in favour of this system of the sharing of the revenues, as the industry say that more of the revenue of the industry will go to the producers who make the films. Therefore, it is this system, which the right hon. Gentleman finds so novel and so strange, that is supported by practically all sections of the industry and which, indeed, they wish to see extended.
Although I think it is perfectly clear that the big circuits and most of the exhibitors have no justified complaint against this tax, I think that there is a different position for the smaller exhibitors, and I think that one of the difficulties of the small exhibitors is that they have to present their case in company with the big exhibitors, and that the big exhibitors have spoilt the case of the small exhibitors. I have had many letters from small exhibitors throughout the country, like that received by the hon. and gallant Member for Angus, South (Captain Duncan).
As in the case he mentioned, they can put up a very strong case from particular balance sheets, some of which I have had sent to me. They are not able to voice their case to the Government through their organisation because they have no separate organisation of their own, and so they have to go to the Government always in company with Odeon and the other big circuits who have a very different interest in this matter. I have had a letter from one small exhibitor who says:
There is no doubt whatever that the small exhibitor really has no voice and no specific organisation for his case in the general survey.
I have had many statements of a similar nature from small exhibitors who have tried to put their case.
But if there were any doubt about this difficulty in which the smaller exhibitor has been placed in presenting his case to the Government, then I think it is shown from the discussions which have taken place in the industry between the Cinematograph Exhibitors' Association


and the British Film Producers' Association. The British Film Producers' Association has got some pretty strong exhibiting influences on it, but they did propose a scheme which, I think, is a better scheme than anything the Cinematograph Exhibitors' Association have put up to the Government.
They proposed a scheme for a "floating penny," as it is called, which would mean putting up seat prices by 3d. instead of 2d. It was opposed by the Cinematograph Exhibitors' Association because it would have involved first run cinemas, including the circuits, in paying their share of the Eady levy to help small exhibitors, and would have forced the small exhibitors to present their case to the British Film Production Fund if they were to get any relief. The proposal of the, British Film Producers' Association was that the small exhibitors whose net box office receipts did not exceed £125 per week on a yearly average should be entitled to receive back the tax which they had paid on gross receipts up to and including £70.
I think that that was a proposal which, at any rate, should have been considered, but it was thrown out, strangely enough, by the Cinematograph Exhibitors' Association, the people who are supposed to represent these small exhibitors. So that any hon. Member, on whichever side of the Committee he may sit, who gets up and says he is speaking in particular for the small exhibitors must recognise that the case of the small exhibitors has been thrown out by the body which is supposed to represent them.
It is because of that that I have intervened in this debate in the hope that these negotiations with the Chancellor can carry through this proposal. I think the Government's further proposals after the Budget are better than their Budget proposals, and that they should certainly be accepted by the industry, in the interests of the cinemagoers—[Interruption.]—and in the interests of the various different sections of the industry. The hon. Member for Croydon, East (Sir H. Williams) has been yelling throughout the debate that he wants the consumers' interests represented, so I have got them in, and that may save him from having to make a speech later on. In the interests of those who go to cinemas and in the in-

terests of British film production I hope the negotiations will be successful. The small exhibitors have a strong case for such proposals as were put forward and which, unhappily, cannot get through to the Treasury, because of the way that the Association misrepresents the real case of the small exhibitors.

10.30 p.m.

Mr. Redmayne: It is not perhaps quite true to say that the case for the small exhibitors cannot get through to the Chancellor of the Exchequer, because many independent exhibitors very often put forward their cases with much better documents and support than those put forward by the associations. I hope to draw the Chancellor's attention to one such case, although perhaps it has already come to his notice. It is perhaps right that four-fifths of the speeches in this debate should relate to the cinema industry and it is also perhaps right that one speech should realise that the Entertainments Duty is a little wider than the cinema industry alone.
There is a danger in all taxation of luxuries of creating anomalies by an entirely arbitrary grouping of these luxuries. The grouping is governed by expediency for the Chancellor, by lack of opposition, or by some other convenient reason that may arise from Budget to Budget. This applies particularly in the case of Purchase Tax, although that is a subject which I must not mention here. And it is applying more and more year by year to Entertainments Duty.
The effect of that tendency, judging from the results of last year's Budget and from the result that may arise from this year's Budget, is that the cinema tax in its expanded form may well be a disappointment to the Chancellor. Had I been the hon. Member for Torquay (Mr. C. Williams) and been fortunate to put forward an Amendment giving the date on which these changes should come into force, I should have made it not 5th October, but a day of greater portent for this House—5th November. I believe that the returns of cinema tax will be up with rocket and very quickly down with the stick.
These anomalies in taxes on luxuries, particularly in Entertainments Duty, can be changed, but it is said that the levelling of them would be unpopular and disas-


trous to the interests concerned. I think we should consider for a moment whether there is any truth in these suggestions. Let us suppose it is possible to level out the anomalies in Entertainments Duty. Suppose the duties now taxed at the lower rates were doubled. If theatres and music halls, football and cricket, and all those that pay duty at the lower rate, had to pay a doubled duty, they would contribute to the need for increased taxation a useful sum, amounting perhaps to £3 million to £4 million. That kind of suggestion produces great indignation here, but in my opinion there would not be any great indignation in the country. It is certain that to tax football and theatres and cricket would be unpopular. That simply means it is thought that it would lose votes.
If the cinema audience is not equally tax and vote conscious then perhaps it deserves to be penalised as it has been in the last two Budgets. I think that the man who goes to a football match looks at this with a much broader view than the politician is prepared to take. He knows that he pays 1s. 6d. for his admission, which includes one penny tax. In my opinion, he would not cavil at paying 1s. 7d. admission which would include 2d. tax, or even 1s. 9d. which would include 4d. tax, when he reflects that his wife and daughter, when they go to the cinema, pay 1s. 8d. for their amusement, and this includes 8½d. in tax. Whether it is football for the man or cinema for the wife, or a bit of both for each, the increase in tax all comes out of the same pocket. So far as the higher rates are concerned the working man pays them just as readily.
There is not much of fair shares in paying, on the one hand, to the theatre, the music hall, football and cricket 3s. 9d., to include 6d. tax, and, on the other, to pay to the cinema, dogs and speedway the same amount to include 1s. 9d. tax. I have no interest in the cinema: I am ashamed to say that I scarcely ever go to the cinema, but, at the same time, I do say that it would be in the national interest that this tax should be levelled up. All the arguments that have been put forward in regard to the cinema apply equally to entertainments of similar value, particularly speedways.
Those are my points on the general issue, but I want to make one point on the smaller issue of hardship to the small cinema exhibitor. The case I want to quote is one which has been sent to the Chancellor of the Exchequer. It has received his acknowledgment, and has also received some publicity in one or two papers during the past year. It is a cinema in Nottingham, the "Majestic," with a seating capacity of 700, and belongs to an independent exhibitor, a man I know—hard working, not particularly poor, not particularly rich. In the last two years his 700-seat cinema has performed the extraordinary service of paying £6,210 in tax, and he has taken out of the cinema in balance during that period nothing whatever. That case was put to the Chancellor of the Exchequer, and I do not doubt he has had many hundreds of others like it.
In the seven days ending April 28, 1951, the proprietor took £121 nett. Against that he had a standing overhead of £95, and this is certified by an accountant and which are perfectly reasonable and right, and include nothing for the owner-manager's own pocket, plus film hire of £29, making overheads chargeable of £125 for that week—a loss of £3 19s. 4½d. I might say—because it was referred to in a previous speech—that at least that owner-manager pays no Profits Tax and no Income Tax on the takings of his cinema. In addition, in that unproductive week he has produced for the Chancellor in Entertainments Duty the sum of £55 18s. 6d.
It is not beyond suspicion in the minds of a great number of people in this country that Socialism wants to drive out the small man in every branch of enterprise. I think that the Chancellor now has a chance, if he wants to take it, of proving that he has some claim to anything but the bitterest criticism and opposition from the small men in every trade and enterprise in this country, and I believe that in the cinema industry that class is as wide as it is in any other enterprise.

Mr. Carmichael: We have had an interesting discussion on the question of the Entertainments Duty. Already, one or two of the recognised authorities in the industry have made their contributions, and I merely wish to make it known at the outset that I have no special direct interest in either


the distributive or exhibiting sides of the industry. In fact, I am an ordinary member of the public who frequently attends film shows in my own area.
I regret that the hon. Member for Rushcliffe (Mr. Redmayne), in his concluding remarks, introduced a political point which was quite unnecessary. He said that Socialists were anxious to drive the small man out of business. I do not want to enter into controversy unnecessarily, but the film industry can give ample evidence of big companies trying to drive out the smaller people.
I want to approach the question as the ordinary citizen would approach it. I think any form of taxation should be imposed in the most equitable manner, and it must be recognised that the cinema is one of the pleasures of the great mass of the people. The live theatre may be regarded as a very important branch of entertainment for certain people, but in the whole of Scotland—I do not say this with pleasure, but with regret—we have not got more than six what may be termed well-established live theatres. I am not talking of the comedy side of entertainment. I am speaking of the theatre in its artistic aspect, providing plays and musical entertainment of a high order.
One must recognise the great claims of the majority of the people, and the cinema is the form of entertainment that they enjoy. I appreciate the point made by the Financial Secretary, that already the Government are prepared to recognise the necessity of avoiding an increased tax for seats under 1s., but I would point out that there must be very few cinemas in the country today, even in the small and thinly populated areas, where there are seats costing under 1s.
10.45 p.m.
Although I appreciate the point, I would like to ask the Financial Secretary whether he and the Chancellor of the Exchequer will consider the possibility of suggesting to the Government a better figure than 1s.—probably 1s. 6d., or 2s. I say that because one gets evidence from another branch of entertainment. Only last week the Football League decided to increase the charges for matches next year by 3d. That will not add one penny of taxation. If one increases the charge at cinemas one is required to add considerably to taxation.
At present, if the gross taking is 9d. for a seat, the tax is one penny. If the cinema people desire to increase the cost by one penny, then they have actually to increase the charge to 1s. 2d. That is a very serious increase. I suggest to the Chancellor of the Exchequer that he might consider the advisability of going a little beyond 1s. I make the point specially for many of the poorer cinemas in the country. In the thinly populated areas, unless some approach is made to the cinema industry in a more comprehensive manner, taxation will ultimately close the cinemas.
There are two further points associated with this increase which are important. They have already been made, but they cannot be emphasised too strongly. First, the conditions of the people within the industry require to be seriously overhauled. The wages which have been mentioned tonight are a disgrace to the industry. It can be argued, because we have had representations before us, that the smaller cinemas cannot possibly approach the problem of increased wages unless they are allowed to make an alteration in their prices. I hope that, recognising the right of the people employed in the industry to a decent wage, that point will be borne in mind.
Further, if people go to an entertainment they are entitled to better comfort than is at present possible in some of the cinemas. The smaller cinemas cannot possibly produce the money needed for renovation or overhaul which they might desire to carry out.
I want now to make one small criticism which I think is justified. There is. I think, a grave danger that the Treasury approaches this problem too often thinking in terms of the productive side. I question very much whether it is the right of the Government unduly to encroach upon the industry to some extent protecting one side against the other. My own view is that the real problem lies in that industry itself being unable to accommodate its different departments. But if it is necessary for the Government to intervene in the manner suggested by the Financial Secretary to the Treasury, would it not be wise for the Board of Trade and the Treasury and the industry to go into conference? After all, the Board of Trade is closely linked with the problem because of the quota system. I gather from people in the industry that, because


of the quota system, there are losses at certain periods of the year.
I am not going to argue that they should not take a quota of British films, but I do suggest that the tax and the quota cannot be examined separately. I think there should be a complete overhaul of the industry, taking into account the quota required. It ought, in my view, to be zonal. I think that it is wise to suggest that the quota in one part of the country should be different from that in another part; and I do say, therefore, that if there is any danger of the negotiations breaking down between the Chancellor and the people associated with the industry, then it would be wise to see if we could not extend the scope of the agenda. We should bring in the Board of Trade, and fix the examination on a much wider basis than at present.
That is something which cannot be done through the Budget, and I do not wish to be out of order on this point, but we are told, year after year in the House, that the industry is in grave danger and difficulty. Year after year we are asked to try to find a solution for the productive side of it, and we find that there is a conflict between the producer and the exhibitor; and we, in this House, seem able to do nothing about it. I hope that something will be done to reduce the burden of taxation on seats, and especially those under 2s., because if that was done, it would help to make possible a better wage condition in the industry and better enjoyment for those people who go to the cinema because they cannot get their pleasures more expensively elsewhere.

Sir H. Williams: I should like to say something on this matter. I took part in the 1926 discussions on the Bill which first introduced the quota system, partly because the hon. secretary of the Cinematograph Exhibitors' Association happened to be one of my constituents, and asked me to help. He is still the hon. secretary, but I mention that in passing. Broadly, there are three parts to this problem. We want cinemas, but we cannot have them unless they are properly maintained. We cannot have cinemas unless there are films, and we all want a reasonable supply of British films. I have no special knowledge of either side of the industry, but I read in the newspapers about the varied troubles of the producing side.
The hon. Gentleman who has just spoken said much with which I agree, but we are always hearing about the many thousands of persons who are employed in the production of films and in showing people to their seats in the cinemas. That is all very true, but then there are some 30 million other people who pay to be shown to their seats. Is there enough consideration for the taxpayer? I consider that I am monstrously over-charged when I go to the cinema, and I do not like the fact that I pay—

Mr. Rankin: Where does the hon. Gentleman go?

Sir H. Williams: To a cinema in the Vauxhall Bridge road; it is quite a nice cinema.
I was saying that the last time I went there I did not like having to pay 3s. 9d.; I think that I paid far too much. The fact is that the taxation of this form of entertainment has gone beyond the economic limit; that is the real issue. I do not go to the cinema very often. For one thing, I am usually taking part in the particular form of entertainment which goes on here, but my wife and I are very fond of the pictures. However, what I want to emphasise is that the cinemas are much emptier than they used to be. I would tell the right hon. Gentleman that the last time I paid a visit to the cinema I noticed that in the best seats—costing 3s. 9d. each—there were 21 people where there was room for 400. There used to be queues outside the cinemas, but there are not any more.

Mr. Rankin: Did the hon. Gentleman go on a Saturday night?

Sir H. Williams: No, it was a Sunday afternoon. I was in church in the morning. [An HON. MEMBER: "With the mayor and corporation?"] Yes, that is the first place where one should consider Sunday cinemas, and I think that I am entitled to go to the cinema after having been to the parish church in the morning.
There are two very large cinemas where I live and they are two which we patronise frequently. But now there is a complete change. It is obvious that the cinema is suffering very severely; it is suffering because the public cannot afford it and because the cinema is overtaxed. That is the economic issue we are up against, not only in respect of the cinema


but of a great many other things. The hon. Gentleman the Member for Devon-port (Mr. Foot) challenged one of my right hon. Friends about this question. My own view is that we are not making sufficient attempt to reduce unnecessary expenditure. I must not go too far, I know, but I am only following the right hon. Gentleman and the hon. Member for Devonport, who were talking about the necessity of raising additional revenue.
I think the Government have to do what I have to do and what the rest of right hon. Gentlemen and hon. Gentlemen have to do—try to fit our expenditure to our income. Every hon. Member has to do it now. Therefore, I think we ought to make some effort to reduce this increased tax. That is the only way to discipline H.M. Government, and make some effective economies.

Mr. Mitchison: I do not propose to take more than a few moments, but I want to repeat, if I may, from a slightly different angle, a point already made by the hon. and gallant Member for Angus, South (Captain Duncan) and by my hon. Friend the Member for Devonport (Mr. Foot). It is in regard to one particular kind of smallish cinema. I call it the semi-rural or the small town cinema. It often has to compete with larger chain cinemas a little distance away. It often is, as in two cases I have in mind, the only cinema in a place of about 5,000 people or about that number of inhabitants. There, they find it extremely difficult to make both ends meet and to maintain the cinema at present.
I think the Chancellor has it in mind, from what was said by the Financial Secretary, but I should like to remind him that the concession that was made to the village cinema, the smallest type of cinema, was made with the express object of preserving that part of the life of a village. There is exactly the same case to be made for the small town, on purely social grounds. That is the first point I wanted to make and I would remind the Chancellor and the Financial Secretary that year by year, since that phrase seems to be popular in this debate, I send him letters from the proprietors of two such cinemas in my own constituency which he will find in what must now be quite a

bulky file in his office. I hope this opportunity will be taken of doing something for that type of case.
11.0 p.m.
My second point is this. I do not want to develop it at length, but I feel that in any concessions which are being made to the film industry, and in any negotiations with them, the monopoly element in the distribution of films really ought to be considered and some action ought to be taken about it. I had a rather bad case some time ago in which a working men's club in my constituency was exhibiting films. They were conforming with the law, and they were doing what they were entitled to do and they were only prevented by the somewhat mono-polistical association within the industry itself from getting modern and recent films. I call that kind of thing a reactionary step. Either stop that kind of exhibition altogether—and no one wants to do that—or, if we are to have it at all, do not put the industry into the position of being able to confine audiences to out of date films. If they persist in doing it, it is time the Government took some action about it.

Mr. Maudling: The hon. Member for Devonport (Mr. Foot) made some most misleading remarks in his speech. He referred, for one example, to the attitude adopted by the unions in the film industry, with one exception, but he did not add that the one exception has a considerably larger number of members in the whole industry than all the other unions in the industry put together. He also dealt with the financial position of the exhibiting side of the industry by referring to accounts, figures and statements made in 1948 when it is common knowledge, I think, that since 1948 there has been a very serious decline in the position of the cinema industry. That seems to me to be an important point.
We must consider whether the position has now been reached when official taxation will lead to diminishing returns. It is a point made earlier by certain hon. Members on the other side of the Committee, but it was the only point to which the Financial Secretary gave no effective answer whatever. In his Budget speech the Chancellor said, I think, it was not unreasonable to look to the Entertainments Duty for some modest contribution to the


cost of re-armament. On economic principles that is no doubt difficult to work if the effect of asking for a higher rate of duty is to diminish the total returns to the Exchequer than it is going to devote to its own purposes.
I hoped the Financial Secretary would deal with that point. Certainly, I was left by his arguments with less knowledge of the present situation than I had when he started. I think we were glad to hear it is not the Government's intention now to raise the tax on the lower range of seat prices, but then he went on to say the Government's new proposals meant there would be more money available for the production side of the industry.
What he did not make clear was whether that additional sum would come from smaller amount given to exhibitors or a larger total amount taken out of the pockets of the public. I think if we are to consider this Clause properly we should have further information on that point. There is no doubt that the cinema industry at the moment is a State industry, as my right hon. Friend the Member for Southport (Mr. R. S. Hudson) said earlier. In my own division, at Boreham Wood, there is the biggest single centre of the film production in this country and there is there, despite the money spent through the National Film Finance Corporation, very substantial unemployment indeed. I do not think that as yet there is any sign of any improvement in that situation.
Turning to the exhibition side of the industry, I think it is quite clear that the position of the exhibitors has been seriously deteriorating. The Chancellor said in his Budget speech that gross box office receipts in 1950 were higher than in 1949. I think that is really due to the fillip given to box office receipts when the new prices were brought in late in 1950. The figures I have been given show there has been a substantial drop in gross box office receipts in the commencing months of this year.
They are the figures contained in this document circulated by the Cinema Exhibitors' Association, the figures on which a certain amount of doubt was cast by the hon. Member for Devonport, but figures which have not been disproved and which are based on facts. They show there has been a very

substantial reduction in operating profits in cinemas, in many cases turning operating profits into operating losses. It is a very significant fact that a comparatively small decline in total box office receipts results in a very large decline in operating profits. With substantial overheads that will inevitably happen, and one must bear in mind that any substantial diminution in box office receipts may mean serious financial difficulty for the film industry.
The only other point I want to make is one raised earlier by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank), to which I think the Financial Secretary to the Treasury replied. It is the method of taxation of this industry which combines the provision of revenue with the operation of price control. I do not believe that we shall ever succeed in solving this problem while maintaining the essentials of the present system intact. It may have worked in the past but with the present rate of duty it appears to be becoming unworkable.
There is the duty on spirits, or the ad valorem duty as in Purchase Tax, but I know of no other duty which combines price control with revenue. When it comes to increasing the price of some seats the revenue takes up to 75 per cent. of the addition. To obtain one halfpenny the industry has to collect another 1½d. on top of that for the Revenue. That is a kind of price control which should not be maintained if the industry is to prosper and to produce the revenue the Chancellor of the Exchequer wants to start the rearmament programme.

Mr. Oliver Lyttelton: The debate we have had on this Clause has been very peculiar, at least in my Parliamentary experience, because I do not think any hon. Member from any part of the Committee has spoken in support of the Government. It may be that I do the hon. Member for Devonport (Mr. Foot) an injustice, because he always manages to mix a certain amount of bitterness with sweetness. He also muddled his figures—but perhaps he thought he was on television—and his milk of human kindness was somewhat curdled. There has not been a single speech that I have heard in favour of the Government.
We remain very much dissatisfied with the attitude of the Government on this matter of film taxation and I hope that we shall hear something more definite. All we have heard is that they intend to perpetuate the muddle into which this matter has got. They intend to go on patching when something more drastic is required. The first suggestion I make is that they should publish in full not only their own proposals but those of the Cinematograph Exhibitors' Association, so that the public may judge where the negotiations are going to get us.
Quite apart from that, an entirely new approach is necessary, and we on this side are objecting to the Clause standing part of the Bill mainly for three reasons. First, we think that the law of diminishing returns is beginning to operate, quite violently. That of course, will affect the workers in the industry. I do not propose to say anything about that, especially because I do not think any hon. Member could better the speech made by the hon. Member for Shettleston (Mr. McGovern) on this subject. It also affects the amenities of the cinema-going public in the picture houses. The second reason why we are against this Clause is because we wish to draw attention to the cinema jungle and jumble which everything the Financial Secretary said presupposes is to be perpetuated. The third reason is that there are very great anomalies in levying these duties.
I ask the patience of the Committee in following me through these three points. First, the law of diminishing returns operates not only directly but indirectly in a subversive way. I must quote once again from the Plant Report which says:
…but when full allowance is made for errors of computation…
—such as that of which the hon. Member for Devonport has been guilty—
it remains abundantly clear that the average receipts fall far short of the minimum average cost of production.
This conclusion has not been denied or traversed by the Government, and the conclusion is perfectly clear that the production of films in this country is permanently unprofitable at the present rate of taxation. I ask the Committee to consider what we should think of taxing any

other industry upon its bookings—not upon its earnings—if an independent committee, set up by the Government, after thorough and objective research into the question found that production was permanently unprofitable. These laws cannot be set aside. They may not operate very quickly, but they operate very surely and are operating now. Not only does the quantity of films produced suffer, but quality as well. There will be too few first-feature films produced in this country and they will, by and large, be of insufficient quality, and attendances and revenue will fall.
Then there is the exhibitor, who, undoubtedly, is now suffering from rising costs and stationary receipts. There are many instances—they have been cited by hon. Members on both sides of the Committee of cinemas that are now losing money, and many of the privately-owned smaller cinemas are threatened with bankruptcy. The rise in costs has already been referred to—a rise of 300 per cent. to 400 per cent. in the ordinary maintenance of the cinema—furniture, and so forth; the safety regulations, which are highly desirable, are to cost the industry £1 million; and there are wage demands of between £2 million and £3 million which, after listening to the hon. Member for Shettleston, we should all feel are justified in present circumstances.
The Committee must also bear in mind, in thinking of the situation of the cinema industry, the threat, somewhat delayed here, of television, for we all know what serious problems television has given to the cinema industry in the United States. First then, I assert that the law of diminishing returns is now operating over the exhibitors, as well as over the producers.
The next subject I wish to raise is that of the cinema jungle and jumble. Under the unscientific and heavy burden of these entertainment taxes, levied not upon earnings but bookings, production of sufficient first-feature films is threatened. In these circumstances, the Government have been brought, by inescapable facts, into the position of trying to put back at the other end some of the money they have taken out of the industry. You put a high tax on bookings and then find the industry cannot stand them, so that you have to organise some means of giving


it back through the Film Finance Corporation, which, although engaged in financing film production, is really giving the industry an indirect subsidy. They are quite frank about it in their own Report. They say if film production were by and large profitable the Corporation might now expect to operate without net loss.
This, in reality, is giving the industry a very necessary but nevertheless clumsy subsidy at the other end, and if production is always to be unprofitable, as the Plant Report says it will be, then losses made against production will in the end result in bad debts. There is a game that I suppose every parent has played with his children, taking from one hand and putting in another. My hon. Friends tell me it is called "Pat-a-cake, pat-a-cake, baker's man." That is exactly what the Government is doing with the film industry. [Interruption.] There seems to be some doubt whether I am entirely orthodox in my definition.
11.15 p.m.
The third point concerns anomalies. Most increases in prices have found their way into the Chancellor's pockets. Not only is the Schedule itself anomalous, but it works by fits and starts. If the exhibitor wants another penny to cover his costs and a reasonable profit on a seat costing 1s. 4½d. without tax, he will have to pay 2d. tax on the increase, and the penny for himself makes 3d. to the public. On a 2s. 6d. seat the difference goes as to a halfpenny to the exhibitor and 6½d. to the Chancellor.
Not only are these figures in themselves anomalous—[Laughter]—hon. Members who laugh are apparently quite unaware how these things work—but if we look at the-percentages we see how they go: on the 1s. seat the percentage is 29, on the 1s. 2d. seat 36, on the 1s. 5d. seat 38, on the 1s. 8d. seat 42, on the 1s. 11d. seat 46, on the 2s. 6d. seat 43 and on the 3s. 4d. seat 46. Not only are the amounts very heavy which the exhibitor has to add for a very small increase himself, but the percentages apparently follow no plan at all; they are completely anomalous and seem to be based on a patch-work policy without any principle at work.
There were other anomalies in the entertainment itself. My hon. Friends will

move new Clauses regarding speedway racing and horse racing. I do not want to anticipate their arguments, except to say that not to classify horse racing as live entertainment is one of the most delicious pieces of nonsense ever heard from the Treasury Bench—and that is saying a good bit. Bertram Mills's circus is a live entertainment. At a dinner the other night I suggested that the Jockey Club should run a few elephants round the park courses, and give performing seals an opportunity in the enclosures, in order to classify racing as a live entertainment. Golf is a live entertainment, and hon. Members know that in that game a man hits a ball—or tries to. But if a man rides a horse it is dead entertainment.
That leads to the curious and illogical conclusion that the ball makes the entertainment live because the ball is dead, and the horse makes racing dead because it is alive. Or is it that it is within the meaning of the Act that the ball is deemed to be alive and the horse is deemed to be dead—unless the horse is accompanied by an elephant or other animal? I am staggered by this example of what the Winchester and New College school are able to do when they really try. I say "Bravo" to the Treasury for this superb example of the reduction to the absurd.
I hope I have shown the Committee in this short time enough to prove my three headings. I suggest to the Chancellor that the time has now come to tear up this Schedule in its present form and, in consultation with the cinema industry, to try again, because it is the one means by which the present proposals can be redrafted in a satisfactory manner. I suggest that the Chancellor tries to make this tax apply scientifically, even if its object should be to raise more revenue out of the industry, which I very much doubt the industry can stand. It will not work. I implore the Chancellor to leave to those who understand the business to run their industry without continual negotiations with the Treasury. No industry ought to depend on immediate plans. They have to have something much more comprehensive, which attacks this problem at the root. It would be much better for all to tear this up and start again.
Lastly, I warn the Chancellor to beware of the law of diminishing returns in this


industry and, at the same time, to take care of some of the absurdities I have mentioned in the application of this tax in other parts of the entertainment industry.

The Chancellor of the Exchequer (Mr. Gaitskell): I am sorry that the right hon. Gentleman threw cold water on the Eady plan. I thought we generally agreed in Committee that that plan, introduced last year, was on the right lines. I should have thought it fairly obvious, that if we want to help the producers—which, after all, was the main purpose behind the Eady plan—it was not possible to do that simply by reducing the Entertainments Duty.

Mr. Lyttelton: I do not wish to be misunderstood. I do not think the right way to do it is to introduce a schedule of taxation which afterwards has to be negotiated outside the schedule. We want a statute which enables people to know where they stand. That is not happening now.

Mr. Gaitskell: That is quite a different point, which I shall come to in a moment.
I should like to make it plain that if we want to help the producer, it is no good simply reducing the Entertainments Duty. The effect is that they will receive one-tenth of what the Treasury receive, the Americans will receive about one-third, and the exhibitors will receive the rest. When we decided to help the producers, we set about it by in effect giving back to the producers part of the Entertainments Duty and arranging it to be shared in the way we thought would help the producers particularly. We have not abandoned that plan at all. What I said in my Budget Speech was that the Eady plan pointed the way to what I thought ought to be done, and that whereas last year we gave up a little revenue for the Treasury, this year I wanted some revenue to help pay for re-armament.
The producing side of the industry have accepted the proposals and there is no difficulty so far as they are concerned. They are content with what we have suggested. The only difficulty arises in connection with the exhibitors. Here let me say that if the right hon. Gentleman and his hon. Friends have raised the point of diminishing returns, of getting less

revenue out of the industry by putting on extra taxation, that view is not shared by the exhibitors themselves, because the proposals they made involved increasing the tax still further. Being in the industry, presumably they are satisfied that the consuming public can stand the increase. I do not think we need worry about that for a moment.
I would agree that to put the tax beyond a certain point might very likely lead to a reduction of revenue, but I am not certain this point has been reached this year. The increase is a small one while the proposals made by the exhibitors themselves were for a slightly higher increase and also involved more expensive seats. We do not need to worry very much about the public reacting very strongly against that.
Therefore, we have this situation. We have been discussing this with the industry. The producers have accepted. We have made new proposals, also I think acceptable to the producing side of the industry, which, unfortunately, the exhibitors are unwilling to accept. I very much regret this, because these proposals certainly involve a substantial improvement in the position of the industry. Taken with last year's Eady plan, they involve for the industry as a whole £7 million a year compared with the position before last year, that being shared, if I remember rightly, in the proportion roughly of 50–50, with rather more going to the producer and rather less to the exhibitors. I hope that they will think again about this.

Earl Winterton: May I ask the right hon. Gentleman a question about this, because he may be able to judge the situation, but the public may not? Will the right hon. Gentleman publish the proposals?

Mr. Gaitskell: I do not think it would be proper to publish them in detail at this stage, and I have carefully refrained from going into the matter for that reason. I would not like to do it without going into it first with the exhibitors.

Mr. R. S. Hudson: Surely it is an old tradition of the House that if a Minister quotes from a document he publishes it. The Financial Secretary quoted from the proposals made to the four associations. We are not supposed to know what these


proposals were, but I certainly think the public are entitled to know what the exhibitors propose and what the new proposals made by the Treasury are, so that they can judge whether the description given to them by the hon. Gentleman was fair or not.

Mr. Gaitskell: I am not quoting from any document, and I am in a difficult position if one right hon. Gentleman asks me to give the information and another suggests that it will be wrong to do so. [Interruption.] I beg pardon; it was the hon. Member for Barnet (Mr. Maudling). We are now in the middle of negotiations with the industry, and I hope very much, as I should have thought the Committee would have hoped, that we should bring these negotiations to a successful conclusion. If the negotiations break down there will be ample opportunities for discussing the matter again when we come to the Schedules or on the Report stage, and no doubt further information can be made available after consultation with the industry. Meanwhile, and during the negotiations, I think it would be wrong to reveal or publish details which might prevent a successful conclusion of the agreement.

Earl Winterton: The Chancellor unwittingly did an injustice by quoting one part of the proposals and referred to the proposals the Government had put. He mentioned, and I will not say whether he is correct, that one proportion of the industry had rejected and the other had accepted. If he is not going to give detailed information, it is unusual, as my right hon. Friend has said, to quote from a document. He should have told as whether unanimous proposals were put to the Treasury which the Treasury had rejected, but it is unfair to mention one part of the negotiations without mentioning the other.

Mr. Gaitskell: My hon. Friend and I have mentioned that another proposal was put forward by the exhibitors.

Mr. R. S. Hudson: This is a matter of some importance and the public should be able to judge both proposals. The trouble is that a considerable number of hon. Members were not in the Committee when the Financial Secretary made his speech. The hon. Gentleman did not limit himself, as he might well

have done, if he had been wise, to saying that negotiations were going on, that they were confidential and that he was not going to say anything about the proposals. He quoted details of them, and quoted proposals made by the Treasury about what was to be done for children. If he quoted—[HON. MEMBERS: "Speech."] We are in Committee, are we not?

The Chairman: The Minister having given way, the right hon. Gentleman is entitled to intervene, but it is not usual to intervene in a Minister's speech at such length.

11.30 p.m.

Mr. Hudson: Nor, if I may say so with respect, Major Milner, is it usual for the Government to give a bowdlerised version of proposals that have been made. It is because they have refused to carry out the normal procedure of publishing a document from which they have quoted that I have risen to my feet. The Financial Secretary quoted some of the Government's proposals about children, but failed entirely to quote similar portions of the industry's proposals covering the same sort of prices of admission. Why did he do it? The only result was to create prejudice in people's minds.

Mr. Gaitskell: Nothing has been quoted from. My hon. Friend has not quoted from any document. He mentioned, in passing, that a proposal was raised about children. It was quite un-controversial, as far as I know. I do not think that is a point at issue at all, but he thought it would probably be of interest to the Committee. I think the Government are entitled to decide whether they should tell the Committee and whether they think the Committee would be interested, as obviously they were, in the way in which we thought this problem might be solved. That is all that has happened. I do not wish to carry the matter any further, only because I do not wish to prejudice the negotiations. If, at a later stage, the negotiations break down completely, no doubt all the offers and counter-offers can be made public, but I submit that meanwhile we had better leave the matter as it is.
There are only two other points of importance which have been raised by the right hon. Gentleman. In the first place,


there is the position of the small exhibitors. I am aware of the number of cases that have been brought up, and as a matter of fact I think that in the discussions—I feel most apologetic in referring to them—with the trade last year and this year a considerable amount of attention has been concentrated on that point. I do not wish to be pulled up by the right hon. Gentleman again and told that I must not give this information, so I will not say more than that is being fully borne in mind in these discussions. We are anxious to try, so far as we can, to improve their position relative to that of other exhibitors.
The last point was the question of the structure of the present tax, and on that I would say that we are prepared to have a discussion with the trade in due course on the present rates of tax and the way in which the incidence is felt, to see if we can get a more satisfactory arrangement. I have no objection to that. The Customs officials are quite willing to sit down with the industry and talk it over with them. But I must say that I do not think it will be very easy—not quite so easy as some hon. Members assume—to find a satisfactory solution.
I must reserve the right, as Chancellor, myself to define, in the last resort, what the taxes shall be, but we are willing to discuss the matter with the industry to see if we can find, before next year's Budget, a more satisfactory arrangement. I hope that with these explanations and assurances we can now have the Clause.

Mr. O'Brien: What does my right hon. Friend mean by "the industry"? Does he refer only to the employing interests or is he willing to consider the trade union interests as well?

Mr. Gaitskell: I am prepared to consult the trade union interests as well.

Mr. O'Brien: I am obliged to my right hon. Friend.

Clause ordered to stand part of the Bill.

To report Progress; and ask leave to sit again.—[Mr. Royle.]

Committee report Progress; to sit again Tomorrow.

TROOPER LLOYD (BURIAL)

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Royle.]

11.35 p.m.

Mr. George Thomas: On Wednesday, 11th April, the people of Cardiff read a newspaper article headed, "Mother needs £100 to bring her dead son home." The article told of a fatal accident on a German autobahn on Monday, 9th April, in which Trooper Lloyd, a soldier, of 20, St. Peter's Road, Cardiff, who was serving with the Inniskilling Dragoon Guards, was killed when returning in a lorry from Army exercises. The Press article to which I have referred revealed that unless £100 could be raised the body of Trooper Lloyd could not be brought home for burial. I wish to quote briefly two paragraphs from the article:
Unless £100 can be raised within the next 24 hours or so, his body will lie in a B.A.O.R. cemetery for a ruling, for a War Office ruling is that the cost of bringing the body home for burial must be borne by the relatives.
Robert's mother, who lives in St. Peter's Road, Cardiff, is a widow, and she cannot find the £100 necessary to bring her son's body back to his native city.
This widowed mother had one married daughter at home, and as a relative wrote to me:
They are not in good circumstances and cannot raise the money themselves. If you can help by seeking a reduction in the cost of bringing home the body, everybody concerned will be grateful.
I did my utmost, but the War Office was like a stone. It was hard and resistant to the appeal.
I want to say at once that I join with other hon. Members in welcoming the Parliamentary Secretary to the Front Bench from which he is to reply, tonight, to his first Adjournment debate. This is, of course, by no means a personal issue. I realise that the views he will express will be those of the War Office. But it is an issue on which the War Office itself. I believe, stands open to condemnation. Fortunately, in the case of my constituent, a good citizen of Cardiff, who wishes to remain anonymous, came forward and paid for the lad's body to be brought home.
On 26th April, the Secretary of State for War told me, in answer to Questions,


that the policy of the War Office is that the interment of soldiers killed on foreign service in peace-time, as in war, should take place in the country in which death occurs. The War Office, he explained, was unable to bear the cost of bringing bodies home to this country for burial. My right hon. Friend went on to explain the steps taken by his Department to reduce the cost of transport in cases where relatives made arrangements at their own expense.
I realise full well that in the last Parliament we had some bitter discussions about cases similar to this one, but I am so appalled at the complete lack of human feeling which the War Office has revealed in this matter that I cannot forbear from raising this question tonight. Trooper Lloyd was conscripted into the Army. He did not ask to be sent to Germany, and his mother certainly did not want him to go. He was snatched from his home by the powers of conscription passed by Parliament, and there was no question of cost when the Army wanted his services. He was rapidly given a uniform, and a travel voucher, and had he been alive today the War Office would doubtless have found the money to send him to the Far East. But he is not alive now, and when he was killed he was given a coffin but the cost of bringing his body back home was not paid.
The policy of the War Office amounts to the imposition of a means test, even at death. For the wealthy family, there is no trouble; they have simply to decide whether or not the body shall be brought home. Wealthy bereaved persons can comfort the mother of the family by saying, "The boy can be brought home if you wish." The War Office blandly states that the same rule applies equally to all recruits, but to me, that is like saying that the Savoy Hotel is open to anyone—if one can pay for it; and that means the privileged few.
I know that sentiment enters into this case, and I hope that my hon. Friend, when he replies, will not use that argument because life would be squalid indeed if all sentiment was absent. Surely there is nothing more natural than that a mother should want her son's body laid to rest with that of his father. For many people, there is an indefinable comfort in being able to go to that spot of

ground which holds the remains of those whom one loves. Those who made this cold, cruel decision on the part of the War Office ought to be made to visit the bereaved parents; and face, as I did, the mother who asks for her son to be returned.
The War Office is even too mean to pay the travelling fare of the mother in order that she might go to Germany for the funeral if she is unable to pay the cost of bringing the body home. Yet, in the War Office, by its very nature, there is squandered in a day more than it would cost in a year to bring home all those accidentally killed in time of peace. I distinguish between burials in time of peace and time of war, because the mass carnage in war conditions the minds of people to prepare themselves for acceptance of the necessity for foreign burial. But that is not so in time of peace, and the War Office is on a sticky wicket indeed if it is going to hold up finance as the obstacle in this matter. It would cost practically nothing; there are transports of many sorts—military aircraft, battleships, and other means of conveyance moving about all the time.
My hon. Friend, in his reply, may well say that his difficulty is to know where to call a halt. For instance, shall we stop in Germany, or bring home those killed in time of peace in the Middle East? What about the lads killed in the Far East under peace conditions? I realise all these difficulties which concern the Department, but inevitably there are matters of finance when the boy is no longer here to be of use. From any country in the world, wherever a British "Tommy" is serving in time of peace, his body should be brought home if the family so desires.
I ask my hon. Friend—and I am sorry that his first job at that Despatch Box is to reply to a debate of this sort—to suggest to the Minister that this shabby policy, for that is all it is, should be reconsidered and that respect for the family unit in time of bereavement is surely the minimum for which we have a right to ask from a Government Department. I believe this is not the sort of decision we expect in a Department with a Labour Government. Undoubtedly, it means that there is a privileged section—good luck to them if they can afford to bring home their boy—but that there is also an unprivileged sec-


tion and to the anguish of bereavement is added the further anguish of the knowledge that had they been able to afford it their boy, too, could rest in the family grave. I earnestly hope that my hon. Friend will be a little forthcoming in his reply.

11.46 p.m.

Major Legge-Bourke: I think all of us will understand the considerable indignation over this case of the hon. Member for Cardiff, West (Mr. G. Thomas), but I hope he will also understand when I say that I regretted some of the remarks he has made tonight. I think it is unfortunate to talk about conscription snatching men away.

Mr. G. Thomas: What is it doing?

Major Legge-Bourke: It is a matter which has been debated and is a majority decision of the country's representatives in the House. It would seem to me, despite all the hon. Gentleman's natural feelings, which I fully appreciate, to have been a little bit better had he been able to word his remarks a little differently. We have had these cases from time to time. I had one in my own division in the last Parliament. They are highly distressing when they happen and we should be only too glad if all the bodies of men who die abroad while serving in the Forces could be brought home.
There must be some limitation on that and the hon. Member himself, I think, sees the difficulty, certainly so far as the Far East is concerned and in times when there are hostilities in some places and not in others. It seems if one argues logically that it is very unfair on those parents whose boys are killed in Korea that they cannot be brought back and that those who die of natural causes, sometimes in Germany, can be. I would say to the Financial Secretary to the War Office that I do not envy him his task in making this decision, but I cannot believe that people in the War Office do these things out of callousness. I believe they try to be as humane as they can, and some of us ought to be more sympathetic with the very hard decisions they have to take, knowing quite well that they will be misunderstood by somebody.
I think we feel that, as a rule, these decisions are taken without any deliberate

callousness and unkindness and that if there is any, it is generally because of the force of circumstances. I hope the hon. Gentleman will be able to tell us that what is being done is the maximum possible. I think that is all we could possibly ask for, and to make sure that in this particular case that everything that could have been done was done.

11.49 p.m.

Mr. Driberg: I am rather sorry that my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) saw fit to accuse the War Office of cold-blooded indifference to human feeling. Although it may seem to him in this particular instance that such is the case, those of us who have had dealings with the War Office on matters of compassionate postings home, and many other things, know that they are very far from being callous and indifferent. I have to condense my remarks into a minute or two, to allow time for a reply, so I hope my hon. Friend will forgive me if I seem a little cavalier and brusque in my comments on the speech, in which he so appealingly and eloquently won our sympathy.
There is one danger implicit in what he is asking for. That is what has happened, since the last war, in the United States, of which I know my hon. Friend is aware. It is difficult to distinguish, as he tried to, between peace and war, because if you admit the principle in time of peace, in time of war it is equally true that the cost of such a project is infinitesimal in relation to the total expenditure of warfare. My hon. Friend knows well enough that, as a result of organized commercial pressure in America by what we call undertakers and they call morticians, there was very large-scale and widespread exhumation of men who had died overseas in the last war, so that their bodies could be taken back to America. The feelings of the relatives were played on in a most shameless way, for purely commercial purposes. I do not believe anything of that kind would happen here, but we do not want the risk of its happening. There is just that one word of warning I feel one ought to utter.
Finally, if it is any comfort to the relatives—and I feel that it may be some slight comfort occasionally—anybody who has been overseas, to the Far East or elsewhere, knows that the war cemeteries are cared for most beautifully by the Imperial


War Graves Commission, and are usually in surroundings of great natural beauty in which these bereaved people, with whose suffering we all sympathise most deeply, may well feel that their loved ones may rest in peace.

11.52 p.m.

The Under-Secretary of State for War (Mr. Wyatt): I am sure the House will agree with me that it was unfortunate that my hon. Friend the Member for Cardiff. West (Mr. G. Thomas) should have accused the War Office of being like stones, utterly inhuman, because, as my hon. Friend the Member for Maldon (Mr. Driberg) has pointed out, I think that the Army takes greater care than anyone else to be fair and compassionate whenever it can be.
I want to assure my hon. Friend right away that this is not merely a matter of finance. It is not merely a matter of paying more, with a few extra pounds enabling him to attain what he wants. I would like to assure him that a great deal of consideration has been given by those responsible in the War Office, and we are very anxious to do the right and the best thing. We realize very deeply the tragedy which is brought into the homes of parents, wives, or near relatives of those who are killed in action or die while serving overseas in the Army, but I am sure my hon. Friend will understand that, although we have the greatest sympathy, we cannot deal with these cases in isolation. We have to consider the principle on which the War Office and the other two Services act on these occasions.
The whole matter was gone into in great detail by the Minister of Defence, when he was Secretary of State for War, in an Adjournment debate in the House on 11th February, 1949. I have very little to add to what he said then, but I will recapitulate the principal points he made then. In the first place, it always has been the practice that those who are killed or die abroad are buried near where they have died by their own comrades. I would like to tell my hon. Friend that the ceremony is both impressive and reverent and is, in fact, a tribute by the Army to the soldier who has just died.
It has always been the policy, and in this the Imperial War Graves Commission agree, not to bring back to this country the bodies of soldiers who have died abroad. There is bound to be a sub-

stantial time lag between the death and the arrival of the body at the soldier's home and, apart from any other reason, that is bound to raise once more the most unhappy emotions which may already have subsided. My hon. Friend doubted whether the cost of bringing bodies back from Germany would be a great charge on the War Office should we bear the expense, but if they are to be brought back from Germany, why should they not also be brought back from the furthest parts of the world where British soldiers are called upon to serve?
In that case the expense would be very considerable indeed, because the expense of bringing a body back, perhaps contrary to my hon. Friend's belief, is greater than that of bringing back soldiers in the ordinary trooping way. It would mean not only expense but also that if the Army undertook this responsibility the comrades of the man who had died would be called upon to perform the duties of undertakers in a sense. It is one thing for a man's comrades to bury him in the solemn dignity of a military funeral and quite another to ask them to accept all those functions to which the undertaker is accustomed in his profession. I am sure my hon. Friend would not wish that duty to be added to those of soldiers now serving in the Forces.
There is, of course, the additional factor of the enormous administrative burden on the commanding officers and units and all concerned with this particular task. All these points are not questions of finance at all, but of the way the Army is run. Again, if we are to bring back, at the expense of the Government, men who in peace-time had died or had been killed by accident, what in logic would distinguish between such deaths and those deaths now incurred in action in Korea and Malaya? One cannot possibly make a distinction of the kind my hon. Friend wishes to make. If we are to do it for one we must do it for all, and the expense and the psychological and administrative burdens on the Army would make that impossible.
My hon. Friend suggested that if no free carriage is to be given then people should not be allowed to have the body of a relation brought back at all, even at their own expense. I understand his point, but I cannot agree to that. In this matter there are two completely logical


positions. The first is the one I have been outlining—that everyone who dies overseas from whatever cause should be brought home. I have tried to explain why that is not a possible course of action. The second is that no one should be brought home, even at the expense of relations. That second course seems to me to involve an element of inhumanity which I should have thought my hon. Friend would have been the first to reject.
If, despite the fact that the War Office makes provision for burial at the place of death, and if, despite the fact that the grave for ever afterwards should be tended with great sympathy, the relations are still anxious to bring the body home I do not see how, though we think they are mistaken, we can stand in their way if they bear the cost. To do so would be somewhat inhuman on our part. In those cases we give all the assistance we can; we do not bear the expense but we co-operate fully with any agent appointed by the relations. In fact, where relatives ask that bodies be brought back we recommend those who charge as small an agent's fee as possible and who understand the task involved.
My hon. Friend has also complained that the cost of bringing bodies back is excessive. I should like him to know that as a result of War Office representation, instituted by my right hon. Friend the Minister of Defence when he was Secretary of State for War, the charges for bringing back bodies from Europe, at any rate, have been greatly reduced. This was possible because the nationalised railways agreed that their freight charges from the Hook of Holland to London should be reduced by nearly half in the case of ex-Service men as against that of civilians. It is difficult to see how we can go further. Where, as a Government Department, we have been able to use our influence with a nationalised industry we have done so, but my hon. Friend must appreciate that in all other cases

the costs are payable to private firms over which we have no sort of influence.
I hope that after this explanation my hon. Friend will feel that in this matter we are not acting through a cheese-paring motive at all, but in a way which we believe to be in the true interests of the dead soldier, of his comrades, who are often his closest friends and who are called upon to bury him, and of the relations themselves. We cannot offer to bring back all those who die overseas, for whatever reason, or to pay the cost ourselves, and it would be wrong to pay for the transport of some and not for all. Further, I think it would be wrong for us to devote money to a cause of this sort when we believe that if there is such money available it could be better spent on the living. Nevertheless, where relatives do insist on bringing bodies of dead soldiers back, we do our utmost to help them, both administratively and in securing the lowest possible charges from British Railways, in so far as they are concerned.
My hon. Friend mentioned the question of getting assisted passages to attend funerals. It may interest him to know that we have just started discussions, not on this point, but on the possibility of extending into peace-time a system of assisted passages to visit the graves. I do not in any way promise that this will be possible, but we are now exploring the possibilities. I hope that with the explanation I have given my hon. Friend will realise we feel as deeply as he does about these matters.

Mr. G. Thomas: I thank my hon. Friend for his reply. I very much appreciate what he has said about what the War Office are trying to do in such cases. Far be it from me to go too far in my description of the War Office. I am sorry if he thought I did.

Adjourned accordingly at Two Minutes past Twelve o'clock.